(Bloomberg) -- Gold declined, paring the biggest rise in a week, as investors assessed the outlook for U.S. interest rates before the Federal Reserve ends a two-day meeting on Wednesday.
Bullion for immediate delivery lost as much as 0.3 percent to $1,288.65 an ounce and was at $1,290.71 by 2:47 p.m. in Singapore, according to Bloomberg generic pricing. Prices rose 0.9 percent on Tuesday, the most since Jan. 20, after data signaled a global slowdown may be hurting U.S. growth. Gold for April delivery fell 0.1 percent to $1,291.60 on the Comex.
Gold rose 9 percent this year amid speculation the Fed will hold off raising borrowing costs amid data showing a contrast between an encouraging U.S. performance and a global outlook that has darkened since it last met. The Swiss central bank unexpectedly abandoned the franc’s cap against the euro before the European Central Bank announced an asset-purchase program to spur inflation, boosting demand for a store of value.
“It will be quite important to see what they do say because this will be the first that we’ve heard from the Fed since the SNB’s move and the ECB’s QE program was announced,” Victor Thianpiriya, an analyst at Australia & New Zealand Banking Group Ltd., said by phone from Singapore, referring to quantitative easing. “There’s still a lot of conjecture as to when” interest rates will increase, he said.
The Fed is forecast to leave rates unchanged this week, a Bloomberg News survey of economists shows. Chair Janet Yellen said Dec. 17 the Fed is unlikely to move before end-April. The central bank has kept its target for the federal funds rate at zero to 0.25 percent since 2008.
SNB Surprise
The Swiss National Bank in a statement on Jan. 15 scrapped its three-year policy of capping franc at 1.20 per euro. The European Central Bank pledged Jan. 22 to inject 1.1 trillion euros ($1.2 trillion) into the currency bloc’s economy.
In the U.S., orders for durable goods unexpectedly fell in December, data from the Commerce Department showed on Tuesday. That follows a report on Jan. 16 showing factory production cooled. The International Monetary Fund and the World Bank cut outlooks for global growth this month.
Silver for immediate delivery dropped 0.2 percent to $18.027 an ounce. Palladium was little changed at $781.03 an ounce, while platinum retreated 0.2 percent to $1,261 an ounce.
News Source : Bloomberg.com
January 11, 2016