Precious Metal, Gold steadied on Wednesday, July 26, as the dollar firmed ahead of a Federal Reserve policy decision and as receding worries over global economic growth led investors to buy equities and to sell assets perceived as safe havens.
Spot gold was flat at $1,248.22 per ounce at 1415 GMT. U.S. gold futures for August delivery fell 0.3 percent to $1,247.90 per ounce, RTeuters reports.
The Fed is widely expected to hold interest rates unchanged, with expectations of another rate hike before the end of the year at less than 50 percent.
The central bank might, however, hint that it will start winding down its massive holdings of bonds as early as September, a move that should push up bond yields, support the
dollar and weigh on gold.
Higher yields increase the opportunity cost of holding non-yielding gold, while a stronger dollar makes dollar-priced bullion more expensive for holders of other currencies.
“The technical break during Asian trade today saw some participants heading for the exits as we near the FOMC rates announcement and it is difficult to see gold making any headway above $1,250 leading into the Fed,” said MKS in a note.
“A hawkish tone from Yellen today will open up a test toward the 200 day moving average $1,229, while a dovish skew is likely to see a recovery test (at between) $1,258 – $1,262.”
Also weighing on gold, holdings at the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 1.13 percent to 800.45 tonnes on Tuesday from 809.62 tonnes
on Monday.
In other precious metals, silver slipped 0.1 percent to $16.47 per ounce. Platinum edged 0.5 percent lower to $922 per ounce, while palladium rose 0.6 percent to $861.35 per ounce.
