Gold traded above a one-week low before the Federal Reserve’s policy decision and as investors assessed falling oil prices and turmoil in Russia.
The Fed ends a two-day meeting today, with economists predicting that Russia’s currency crisis and the oil rout won’t stop policy makers from dropping a vow to keep interest rates low for a “considerable time.” Gold rose as much as 2.5 percent yesterday before paring gains as a plunge in Russia’s ruble spurred speculation that the nation may sell gold.
“Gold has been bashed between a lot of external factors,” Matthew Turner, an analyst at Macquarie Group Ltd. in London, said by phone. “Tightening of Fed policy is bad for gold, especially if it’s done in a low inflation environment.”
Gold for immediate delivery added 0.4 percent to $1,202.13 an ounce by 12:03 p.m. in London, according to Bloomberg generic pricing. It reached the lowest since Dec. 8 yesterday. Gold for February delivery gained 0.6 percent to $1,201.80 on the Comex in New York, after dropping the previous five days in the longest run of losses since Nov. 6.
Oil traded near a five-year low as Russia reiterated that it will keep crude production steady next year. The nation struggled for a second straight day to reverse a rout in the ruble with emergency measures. Russia has tripled its gold reserves since 2005.
“They have been very good buyers of gold for a long time now and it would be entirely possible for them to sell some of this for conversion purposes,” David Govett, head of precious metals at Marex Spectron Group, said in an e-mailed report.
Silver climbed 1 percent to $15.8837 an ounce in London, after tumbling 8 percent in the previous three days. Platinum advanced 0.4 percent to $1,203 an ounce. Palladium rose 0.6 percent to $787 an ounce.
Source : www.bloomberg.com
January 11, 2016