Gold in tight range

SINGAPORE — Gold was trading in a tight range yesterday as investors awaited the release of the minutes of the October Federal Reserve policy meeting later in the session for clues on when the bank will trim its stimulus. Bullion failed to make any headway despite dovish comments from Fed chairman Ben Bernanke about the bank’s bond purchases as a lack of major US economic data and lacklustre physical demand prevented investors from taking any big positions.

“Gold is in a holding pattern right now and is struggling to find a catalyst to move prices either way,” ANZ analyst Victor Thianpiriya said.
Thianpiriya said the next major event that could move prices was the release of non-farm payrolls data, which was expected only in early December.

“Physical demand is not weak but it is not explosive either for the shorts to cover their positions,” he said.
Spot gold was largely unchanged at US$1 275,41 an ounce by 3.20am GMT after ending flat in the previous session.

The dollar was under pressure but global shares held steady after Bernanke’s comments. Minutes of the October 29-30 Fed meeting are due to be released later yestersday, with investors looking for detail of Fed discussions on the timing of any tapering.

Bernanke said on Tuesday the Fed would maintain ultra-easy US monetary policy for as long as needed and would only begin to taper bond buying once it was assured that labour market improvements would continue. Although the economy had made significant progress, it was still far from where officials wanted it to be, Bernanke said, supporting expectations that the Fed would not immediately roll back its US$85 billion in monthly bond purchases.

The Fed could need to wait until next year, possibly until March, before beginning to wind down its stimulus programme, Chicago Fed president Charles Evans said.

The bond purchases had been a key support for gold prices until recently as investors sought a hedge against inflation. However, the metal has dropped nearly 25 percent so far this year as an improving economy prompted investors to channel money towards stocks. — Reuters.