Gold Ends Higher As Dollar Weakens Ahead Of Fed Meet
Washington (Sept 16) Gold futures ended higher for second straight session Tuesday, as the dollar trended lower against some select currencies and ahead of the highly anticipated two-day US Federal Reserve policy meet that begins today in Washington . Investors expect the central bank to take a hawkish stand and await cues as to when rates would be hiked following a slew of positive economic data out of the US lately.
Bullion has fallen this summer amid signs the Federal Reserve may start hiking rates sooner than anticipated, but uncertainty about the Fed's upcoming statement has helped prices level off this week.
While most traders expect the central bank to hint at plans to tighten monetary policy on Wednesday, some still think the Fed will keep its pledge to keep rates near zero for a "considerable time."
Gold for December delivery, the most actively traded contract, gained USD1.60 or 0.1% to close at USD1,236.70 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday.
Gold for December delivery scaled an intraday high of USD1,243.20 and a low of USD1,232.20 an ounce.
On Monday, gold futures ended up USD3.60 or 0.3% at USD1,235.10 an ounce, snapping a five-day losing streak that took prices to the lowest in eight months.
Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, remained unchanged at 788.40 tons on Tuesday, from its previous close of 788.72 tons.
The dollar index, which tracks the US unit against six major currencies, traded at 84.09 on Tuesday, down from its previous close of 84.25 late Monday in North American trade. The dollar scaled a high of 84.37 intraday and a low of 84.86.
The euro trended higher against the dollar at USD1.2965 on Tuesday, as compared to its previous close of USD1.2940 late Monday in North American trade. The euro scaled a high of USD1.2995 intraday and a low of USD1.2922 .
In economic news from the US, data from the Labor Department showed producer prices were unchanged as expected in the month of August, after inching up by 0.1% in July. Excluding decreases in food and energy prices, core producer prices ticked up by 0.1% in August after edging up by 0.2% in the previous month. The modest increase also matched estimates.
Germany's investor confidence weakened to a level last seen in late 2012 amid concerns of rising geopolitical tensions hurting the European economy, the Centre for European Economic Research/ZEW reported Tuesday. The ZEW economic sentiment index fell to 6.9 in September from 8.6 in August. Nonetheless, the weakest reading since November 2012 was above economists' forecast of 5.
UK inflation slowed marginally as expected in August on drop in prices of motor fuels and food, the Office for National Statistics revealed Tuesday. Consumer prices rose 1.5% year-on-year in August, slower than the 1.6% rise in July, in line with economists' expectations.