Gold slips as dollar firms ahead of Fed policy statement

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BENGALURU: Gold eased to a one-week low on Thursday, as a recovery in the dollar and improved appetite for riskier assets ahead of the U.S. Federal Reserve’s policy statement, pushed investors away from bullion.

Spot gold fell 0.12 percent to $1,224.18 per ounce at 10:39 EST, after touching its lowest since Nov. 1 at $1,219.59 earlier in the session.

U.S. gold futures for December delivery fell 0.3 percent to $1,224.90 per ounce.

“Gold is unquestionably dollar-watching, and by extension looking at the (interest) rates,” said Ross Norman, chief executive officer of Sharps Pixley.

“The market is drifting a little lower today on expectations of further rate hikes. If the rates go higher, it is a slightly negative story for gold.”

Although the Fed is not expected to raise interest rates until its next gathering in December, market participants are waiting to see whether it offers clues about possible rate increases in December and in 2019.

Higher interest rates raise the opportunity costs of holding gold, which earns nothing and costs money to store and insure.

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