adminLONDON. — Gold was trading in a tight range below $1 300 an ounce on Wednesday, pressured by a stronger dollar ahead of a Federal Reserve policy decision and US gross domestic product data due later in the day. Investors were reluctant to take big positions, mostly on expectations US economic reports, which include July non-farm payrolls on Friday, will show the world’s biggest economy is on a steady recovery path.
Spot gold was flat at $1 297,85 an ounce by 9.53am GMT, after breaking below the key $1 300 level in the previous session.
The metal was headed for a 2,2 percent monthly loss after a 6 percent gain in June, when investors turned to gold, often perceived as an insurance against risk, on international political tension.
US gold futures were down 0,1 percent to $1 297,60 per ounce.
“The metal is trading more or less in the middle of the recent ranges, $1 290-$1 320, and will likely continue to do so at least until tonight’s major data releases,” MKS Group said in a note.
“Major support now sits at (the) 200-day moving average of $1 285,50 with the topside likely to see heavy selling between $1 320 and $1 325 capping the market in the absence of any geopolitical surprise.”
The dollar traded at six-month highs against a basket of currencies, as investors awaited US growth figures for the second quarter, due at 12.30pm GMT. A statement from the Federal Reserve’s two-day policy meeting due for release at 6pm GMT will also be closely monitored.
“It should be priced in that the Fed is going to continue to reduce the volume of monthly bond purchases but some market participants would like to get a little hint about the direction of interest rates,” Quantitative Commodity Research director Peter Fertig said.
Recent strong economic data have raised speculation that the US central bank may raise rates sooner than expected.
Higher rates would encourage investors to withdraw money from non-interest-bearing assets such as gold.
While the focus will be on the Fed statement, markets are also watching world developments for any worsening of tension in the Middle East and Ukraine.
The European Union and the US on Tuesday announced further sanctions against Russia, in the strongest international action yet over Moscow’s support for rebels in eastern Ukraine.
Israel knocked out Gaza’s only power plant and pounded dozens of other high-profile targets on Tuesday, while Egyptian mediators prepared a revised proposal for halting the violence in the enclave.
Spot silver was up 0,2 percent at $20,56/oz.
It touched a five-week low of $20,26 on Thursday and the trend is expected to continue in the near future as analysts predict.
Platinum rose 0,3 percent to $1 476,90/oz, while palladium gained 0,2 percent to $876,60/oz. – Reuters.
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