Gold futures moved lower in electronic trade Tuesday, handing back a portion of their gains from the previous session as the dollar rose, while this week’s Federal Reserve decision loomed over the market.
Gold for December delivery fell $5.20, or 0.4%, to $1,312.60 an ounce after rising 0.7% Monday on the Comex division of the New York Mercantile Exchange.
Likewise, December silver lost 14 cents, or 0.7%, to $21.87 an ounce, paring a 1.3% gain the day before.
A stronger dollar helped pressure the precious metals, with the ICE dollar index rising to 81.326, up from 81.268 late Monday in North America. When the dollar appreciates, it makes dollar-denominated commodities more expensive for holders of other currencies, often dampening demand.
As with most other asset markets, the Fed’s policy decision and forecast, due Wednesday, were a major focus.
On balance, economists’ expectations called for the Fed to reduce its stimulus for the first time, likely cutting its $85 billion a month in Treasury and mortgage-securities purchases by $10 billion.
German metals group Heraeus said “a reduction of asset purchases by $10 billion per month is now broadly reflected in the prices.”
“However, in the current environment, we do not rule out that the gold price gives way again: A first psychological support is at $1,300 an ounce, but also a decline to $1,270 an ounce might be on the cards,” they wrote in a recent note.
Marex Spectron precious metals chief David Govett also saw “a small amount” of tapering already priced into gold, according to Dow Jones Newswires, and tipped a $1,300-$1,350 range for the metal until the Fed announcement.
In other trading Tuesday, December palladium edged up 65 cents, or 0.1%, to $706.70 an ounce, while October platinum was little changed, losing just 30 cents to $1,441.20 an ounce.
December copper shed a fraction of a penny, a 0.2% loss that kept the contract at $3.22 a pound.
Source : Marketwatch