Gold price bounces from near 10-month low before Fed decision on rates

Singapore (Dec 14)  Gold bounced from its lowest close in 10 months before the US Federal Reserve's meeting to set interest rates amid unanimous expectations for the first increase this year.

The metal has tumbled in the past month, partly on anticipation of the decision as well as a surge in US equities to records since the election of Donald Trump as president, who has pledged to spur investment. Fed funds futures show investors are pricing further increases in borrowing costs next year.  "The reality is the Fed's expected hike should be pretty much priced in," said Robin Bhar, an analyst at Societe Generale SA, said by phone.

While investors will be watching for Fed Chair Janet Yellen's comments on future monetary policy, they shouldn't expect much given the uncertainty over Trump's policies, Mr Bhar said.

"Yellen's hands are tied and will be until there's more policy certainty from the incoming president," he said.

Source: TheBusinessTimes