WebSify
Follow us on
Mail
Print

Gold pares earlier losses, silver falls on Fed speculation

Source : REUTERS
Last Updated: Tue, Aug 20, 2013 11:29 hrs
&#8203;gold ring<br>

Gold prices steadied on Tuesday, paring earlier losses as the dollar fell against a basket of currencies, but remaining in a narrow range ahead of the release of minutes of the U.S. Federal Reserve's July meeting on Wednesday.

News from the Fed is being closely watched for clues on the outlook for U.S. monetary policy, a key driver of gold prices, as speculation mounts that the bank may taper its $85 billion monthly bond-buying programme from as early as September.

Spot gold was at $1,366.14 an ounce at 1034 GMT, little changed from $1,365.48 late on Monday, while U.S. gold futures for December delivery were up 50 cents at $1,366.20 an ounce.

The dollar index fell 0.3 percent and world shares sank to their lowest in more than a month on Tuesday on uncertainty ahead of the release of the Fed minutes tomorrow.

"I don't think the minutes will provide a clear signal about the September taper. If they could have, they would already have done so in the FOMC statement," said Peter Fertig, a consultant at Quantitative Commodity Research.

"We will just get a reflection of the discussion, and we already know that some members would vote to start the tapering, and others would like to wait and see. It will be further waiting and further speculating," he added.

Gold fell as low as $1,352.20 an ounce in earlier trade, following silver, which slid 3.7 percent to hit a low of $22.26 an ounce after posting a 13 percent gain last week. Silver had risen for eight consecutive sessions to last Friday.

Spot silver was last trading at $22.87 an ounce, down 1 percent, as worries over U.S. stimulus and technical selling dragged it lower in its second session of losses after its biggest one-week rally in five years.

PHYSICAL DEMAND

Gold buying from China, the world's second largest bullion consumer, was quiet on Tuesday, traders said. Shanghai gold futures fell 1 percent after a three-session rise.

Indian gold futures eased from an eight-month high on Tuesday as a recovery in the rupee and an early dip in overseas markets prompted buyers to cash in gains.

Technical indicators show highly overbought conditions, leading to profit-taking, said Gnanasekar Thiagarajan, director with Commtrendz Research.

Indian traders said they will start importing gold again over the next week, after the county's central bank clarified a rule that stopped the flow of the precious metal into the top gold consumer at the end of July.

"Gold may find support from optimism that India's bullion imports may resume. Meanwhile, above-average rain across most parts of India so far this monsoon season is an encouraging sign for physical gold demand later this year," HSBC said in a note.

Data from the U.S. Mint showed that August sales of American Eagle gold bullion coins stood at just 3,000 ounces as of Monday, far lower that the 39,000 ounces for the whole of August last year and the monthly average of almost 100,000 ounces for the first seven months of this year.

Platinum was last trading at $1,508.24 an ounce, up 0.4 percent, while palladium was down 0.1 percent at $747 an ounce.

blog comments powered by Disqus
most popular on facebook
talking point on sify finance