Gold price trades in tight intraday range as market awaits FOMC conclusion
San Francisco (July 28) The gold price continued to trade within a tight intraday range on Tuesday, with much of the market poised for the conclusion of the Federal Reserve’s last meeting before the summer break. Spot gold was last up $1.20 at $1,094.60/1,095.40 per ounce, having traded within an intraday range of just $8. In other metals, silver was last up one percent at $14.66/14.71 per ounce – a 14 cent gain so far. Platinum meanwhile was up $2 at $980/985 and palladium up $9 at $618/624.
Today begins the initial two day Federal Open Market Committee (FOMC) meeting, which will likely keep much of the market on the sidelines until its concluding press conference on Wednesday. A rate hike is unlikely, but investors will suss out any information in regards to a possible September hike after an increasingly hawkish tone has emitted from the Federal Reserve.
“The precious metals complex is likely to trade sideways until the release of the July FOMC statement. Precious metals will likely continue to be influenced by the vagaries of the US dollar,” FastMarkets analyst Boris Mikanikrezai said. “That said, given the FOMC monetary policy decision is likely to be in line with market expectations [no increase in the federal funds rate at the July meeting], the trajectory of the US dollar will likely be impacted by developments in the Chinese stock market.
Should the sell-off in equities intensify, the US dollar could push lower, partly triggered by the unwinding of the yen and euro carry trades, which in turn could provide some support to the complex,” he added. Today the dollar has picked up some of the slack from yesterday’s session, it was last up marginally at 1.1041 against the euro.
The Chinese stock market rout continued this morning – though not as much as Monday’s 8.5 percent slump – the Shanghai Composite closed down nearly 1.7 percent. European and US markets are however on track for a positive session. - See more at: