Gold price weakens as Fed meeting looms
London (Jun 16) Gold futures edged lower Tuesday, undercut by a stronger dollar ahead of this week’s Federal Reserve meeting.
Gold for August delivery on Comex GCQ5, -0.66% fell $3.10, or 0.3%, to $1,182.70 an ounce, building on modes while July silver SIN5, -1.14% lost 11.8 cents, or 0.7%, to $15.965 an ounce.
The Fed’s rate-setting Federal Open Market Committee will conclude a two-day meeting Wednesday. The central bank is expected to leave interest rates unchanged, but investors expect clues on the timing of a widely anticipated rate hike.
A hawkish tone “could bring a rally for the dollar, which could push the gold price lower,” said Naeem Aslam, chief market analyst at Ava Trade. “
The question with whether Yellen “remains elusive” on rate hikes or instead “draws a firm deadline” for a rate rise, Aslam wrote. The Fed’s growth forecast will also matter, with a bullish outlook likely to prove positive for the dollar and negative for gold.
Greece remains the other potential catalyst for gold, which so far has failed to sustain much safe-haven buying interest despite mounting fears of a potential default that could lead to a Greek exit from the eurozone.
“Traders so far have been immune to this Greek default situation, but now it is becoming more real and require the solemn attention of the policy makers before the entire situation gets out of hand, which could really push the metal higher,” Aslam said.
In other metals trade, July platinum PLN5, -0.62% fell $4.70, or 0.4%, to $1,083.90 an ounce, while September palladium PAU5, +0.28% rose $1.10, or 0.1%, to $735.25 an ounce.
July copper HGN5, -1.04% HGN5, -1.04% dropped 1.45 cents, or 0.5%, to $2.6325 a pound.