Gold fell after a three-day rally as investors waited for minutes from the Federal Reserve’s last meeting that may give clues on timing of higher interest rates.
The minutes, due at 2:00 p.m. in Washington, cover the Federal Open Market Committee’s Dec. 16-17 meeting, when the central bank said it will be “patient” in considering the timing of the first rate increase since 2006. A rebalancing of commodity indexes may lead to declines in gold in the coming days, UBS AG said in a research report.
“Some consolidation at this point is understandable,” UBS analysts Edel Tully and Joni Teves said in a report. “Caution may be warranted here as a few risk events are in store for the market this week.”
Bullion for immediate delivery fell 0.3 percent to $1,214.65 an ounce at 10:43 a.m. in London, according to Bloomberg generic pricing. The metal rallied to a three-week high yesterday amid concerns about the health of the European economy.
Global holdings in gold exchange-traded products fell yesterday to 1,597.4 metric tons, the lowest level since April 2009, according to data compiled by Bloomberg.
A rebalancing of commodity indexes, expected to run from Jan. 8 through Jan. 14., may lead to some funds selling metals to match the changes, UBS said in the report.
Silver for immediate delivery dropped 0.6 percent to $16.4335 an ounce. Prices closed yesterday at the highest level in almost a month.
Platinum was little changed at $1,220 an ounce, and palladium slipped 0.3 percent to $800.93 an ounce.
January 11, 2016