Gold holds below US$1,200 ahead of Fed


  • Business
  • Wednesday, 17 Dec 2014

Spot gold was up 0.1% at US$1,197.61 an ounce by 0040 GMT after a volatile session on Tuesday that pulled it to a one-week low of US$1,188.41 before ending marginally higher.


SINGAPORE: Gold steadied at just below US$1,200 an ounce on Wednesday ahead of the outcome of the US Federal Reserve's last policy meeting of the year that may sgnal how soon it will raise interest rates.

Investors were also keeping an eye on Russia after the rouble plunged more than 11% against the dollar on Tuesday despite a hefty interest rate hike by the central bank.

Spot gold was up 0.1% at US$1,197.61 an ounce by 0040 GMT after a volatile session on Tuesday that pulled it to a one-week low of US$1,188.41 before ending marginally higher.

US gold for February delivery rose 0.3% to US$1,198.30 an ounce.

Investors will be watching whether the Federal Open Market Committee will remove the phrase "considerable time" in the statement due at the end of a two-day meeting with regard to the timing of an interest rate hike.

Dropping that phrase would mean the Fed is preparing the market for a rate hike next year as the economy gathers strength, analysts say, which could weaken prices of non-interest bearing assets such as gold.

Further losses in oil may also weigh on gold after Brent crude fell below US$60 a barrel for the first time since 2009 with major oil producers in no mood to curb output despite a well-supplied market.

Meanwhile US housing starts fell in November as groundbreaking for single-family homes declined after two hefty increases, in what appeared to be a brief pause in a trend of gradual recovery.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings slipped to 721.56 tonnes on Tuesday from 723.36 tonnes on Monday.

In other developments, world markets braced for more volatility as tumbling oil prices and a brewing financial crisis in Russia sent investors stampeding for safe havens such as the yen and US Treasuries. – Reuters 



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