BULLION LATEST 18/09: Gold succumbs to selling pressure; focus on Fed meeting

The spot gold price was quoted at $1,317.85-1,318.25 per oz as of 04:25 GMT, down $2.0. Trade has ranged from $1,315.50-1,319.70 so far today.

• A firmer dollar and lack of geopolitical risk has seen investor appetite for the yellow metal decline, with prices succumbing to selling.
• The dollar index was recently at 91.85, still off a multi-year low of 91.01 seen on September 8.
• “Gold’s correction lower continues in Asia this morning following Friday’s $15 sell-off from $1,335 to $1,320. Gold fell to $1314.50 on the Comex open this morning before catching its breath and rising to its present level at $1,317 as a lack of weekend event risk saw hedges unwound,” Jeffrey Halley, senior market analyst at Oanda, said.
• “Gold prices also came under some selling pressure, with investors dismissing geopolitical risks and instead focusing on the possibility of rate hikes from central banks,” ANZ Research noted.
• Expectations of a rate increase by the US Federal Reserve in December have risen sharply in recent weeks, and now sit at around 46%, the bank added.
• Investors will be focused on the upcoming two-day US Federal Open Market Committee meeting, which begins on Tuesday and concludes with a news conference from chair Janet Yellen, as the US central bank is expected to announce a balance sheet reduction to ‘normalise’ monetary policy.
• The committee is unlikely to do anything with rates at this meeting but could drop some hints on its plans for future rate changes.

Silver, PGMs

• In the other precious metals, the spot silver price was up $0.04 to $17.595-17.615 per oz.
• Platinum increased $3.0 to $966.0-971.0 per oz, and palladium rose $6.0 to $927.0-932.0 per oz.
• On the Shanghai Futures Exchange, gold for December delivery was recently at 280.15 yuan ($42.75) per gram, and the December silver was at 3,967 yuan per kg.

Currency moves and data releases

• The dollar index was down 0.02% at 91.85.
• In other commodities, the Brent crude oil spot price was up 0.13% to $55.69 per barrel, and the Texas light sweet crude oil spot price eased 0.04% to $50.42.
• In equities, the Shanghai Composite was up 0.31% to 3,364.14.
• In US data on Friday, core retail sales undershot with a 0.2% rise in August, compared with an expected and previous increase of 0.5% and 0.4%, respectively. Industrial production for August also disappointed with a decline of 0.9% – an increase of 0.1% had been expected.
• In data today, the EU’s final CPI and the USA’s NAHB housing market index are of note.
• In addition, Bank of England governor Mark Carney is speaking.