US MIDDAY: gold slips

July 30, 2013

Gold slipped on Monday, as investors took profits after three weeks of gains and turned their attention to a US Federal Reserve policy meeting later this week that is widely expected to reaffirm its near-zero interest rate stance. Spot gold eased 0.29 percent to $1,329.44 an ounce by 12:39 pm EDT (1639 GMT). Last week, the precious metal regained the $1,300 level for the first time in a month. It rose 9 percent over the last three weeks.

US benchmark gold futures for August were up $7.50 to $1,329 an ounce, a 0.56 percent gain. “I think people want to stay on the sidelines until the Fed meeting and this will generate a lot of two-way business in the next couple of sessions,” MKS SA senior vice president Bernard Sin said. “Overall, traders will keep taking profits rather than trying to build long positions until the uncertainty around the timing of the Fed tapering dissolves.”

The Fed’s policy setting Federal Open Market Committee (FOMC) begins a two-day meeting on Tuesday and is expected to release its latest statement on Wednesday afternoon. The European Central Bank and the Bank of England also meet this week and are expected to repeat or refine their previous guidance that borrowing costs would remain extraordinarily low as long as growth is sub-par and inflation is not a threat. Bullion has lost a fifth of its value this year as signs of an economic recovery in the United States have sparked speculation of an end to easy central bank money. The launch of China’s first two gold-backed (ETFs) opened to lacklustre performance on the Shanghai Stock Exchange.

HuaAn Gold ETF and Guotai Gold ETF raised a total of 1.6 billion yuan ($260.9 million) in their initial funding round, coming in well below expectations due to sliding gold prices and a recent domestic credit-crunch scare. In a gauge of investor sentiment, CFTC data showed options and futures of COMEX gold holdings rising by more than 14,500 contracts to reach a total of more than 70,000 in the week to July 23. Spot silver was down 0.30 percent to $19.89 an ounce, having touched a one-month high of $20.60 last week. The gold/silver ratio rose to its highest since August 2010 at nearly 67. Platinum rose 1.09 percent to $1,440.49 an ounce and palladium gained 2.62 percent to $741.97 an ounce.Courtesy Reuters

Published in

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More