Gold steadies as traders weigh outlook for Fed rate cuts
Bullion traded near $2,626 an ounce in thin trading after closing 1.1% higher on Friday.
Gold prices sunk Tuesday as investor worries spiked ahead of a Federal Reserve policy meeting that may offer further clues to support expectations of a mid-2015 rise in U.S. interest rates.
“The focus is on the Fed today,” David Meger, the director of metal trading at HighRidge Futures LLC in Chicago, told Bloomberg. “The Fed will potentially drop the patient word, and that means the rate hike will be soon. Gold being a non-interest bearing asset will obviously be a loser in that scenario.”
April gold futures hit a four-month low, pressured by chart-based selling that included sell stop orders being triggered when key near-term technical support levels were breached.
They recovered a bit later, trading at $1,153.70 an ounce at 10:06 a.m. on the Comex in New York.
Source: Kitco live charts.
Bullion bears have gained more downside technical momentum and now their next objective is to push prices below technical support at the November low of $1,132.10.
The precious metal has lost over 8% so far this year and was trading at a discount of about $50 an ounce to gold — the widest spread in the last two years.
Comments
John K
Got a bad feeling in the pit of my stomach about the spot gold price – surprised (and concerned) that it hasn’t been able to bounce away from $1150. RIP goldbugs.