Gold lower as Fed starts latest meeting
New York (Mar 17) Gold eased lower as the US Federal Reserve prepares to deliver what may be a pivotal moment for the metal this year.
The two–day meeting is being tipped by many to end with a clear hint, if not indication, over the timing of a US rate rise and the problem for gold is that it may be June.
The dollar has already soared in anticipation, with gold out of favour as consequence of its position as hedge for the US currency.
Any sign of a rate rise could send the US currency even higher and with no signs consumers want to take up the slack, gold may be under pressure again when the meeting ends tomorrow evening.
Surprisingly, though, gold is not the worst performing precious metal this year.
That honour rests with platinum, which has slumped to a five-and-a-half-year low on Tuesday due again to a combination of the dollar and a recovery in supply after last year’s prolonged strikes in South Africa.
The price has fallen 8% already this year, and like gold, hopes that Chinese consumers might step in to provide a prop have been dashed.
The World Platinum Investment Council recently forecast that Chinese jewellery demand would be flat this year.
Analysts said jewellery used to be the buffer for platinum prices, but if is not picking up with prices so weak that is a worrying sign for the industry.
Spot gold was US$4 lower at US$1.150 an hour after Wall Street opened, silver was US$15.59 while platinum shed US$10 to US$1,094.