Gold eases, near 2-week low as market eyes Fed statement
Singapore (Mar 16) Gold slid for a fourth consecutive session on Wednesday, hovering near its lowest in two weeks although investors were waiting for the outcome of the Federal Reserve policy meeting.
The Federal Open Market Committee (FOMC) began its two-day meeting on Tuesday and it is likely to issue a statement at 1800 GMT.
Spot gold was down 0.1 percent at $1,230.61 an ounce by 0841 GMT and U.S. gold was largely unchanged at $1,231.6 an ounce. Spot gold fell to $1,225.70 in the last session, its lowest since March 2.
"Gold's reign as the top performing asset since the start of the year is largely supported by safe haven demand, and buying-interest into gold once again should not be discounted, especially if global growth sentiment turns south into the year," said OCBC Bank analyst Barnabas Gan in Singapore.
"Still, this is not our base case scenario, given our bearish outlook on gold prices. This outlook is very much underpinned by further rate hikes by the FOMC."
Worries about global growth and financial instability had led investors to reprice prospects for increases in U.S. rates, sending safe-haven gold to a 13-month high last week. But solid U.S. data readings more recently have rekindled market expectations of further tightening this year.
Fed policymakers are expected to leave short-term interest rates unchanged but also to signal that a rate hike is not too far off as long as the job market and inflation continue to improve.
Further U.S. rate rises could lift the opportunity cost of holding non-yielding bullion.
SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.26 percent to 792.23 tonnes on Tuesday from 790.14 tonnes on Monday.
In other news in the precious metals market, Russia plans to hold an auction for the Sukhoi Log gold deposit before the end of this year, Interfax news agency cited Russian Deputy Prime Minister Alexander Khloponin as saying on Tuesday.
The Sukhoi Log deposit, in the Irkutsk region of Siberia, has remained one of the world's largest untapped gold deposits for half a century and Russia has been considering selling rights to the deposit for 20 years.