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BULLION LATEST 26/07: Gold weakens as investors await FOMC statement

Gold fell during Asian morning trading on Wednesday July 26 as traders remained cautious ahead of the US Federal Open Market Committee (FOMC) policy statement later today.

July 26, 2017
By Generic people page

The spot gold price was quoted at $1,246.80-1,247.10 per oz as of 04:28 GMT, down $7.8. Trade has ranged from $1,246.75-1,257.75 so far today.

  • The dollar has rebounded somewhat this morning, but remains in low ground – it was up 0.05% at 94.09 as of 05:13 BST.
  • “The weaker dollar failed to ignite gold prices, with traders remaining cautious as the US Federal Reserve continued its two day meeting,” ANZ Research said on Monday.
  • The FOMC’s rate decision today is unlikely to provide much support to the dollar with the market largely expecting fed funds to remain unchanged.
  • The market is pricing in a 96.9% chance that the benchmark Fed funds rate remains unchanged with only slightly better odds in the September meeting.
  • However, investors will be keeping a close eye on the FOMC’s statement, hoping for clues on the outlook for the US central bank’s monetary policy – with any perceived hawkish language potentially sending gold lower.
  • Support for the yellow metal should still come in the form of political uncertainty in the USA, however, as investors continue to seek out haven assets.

Silver, PGMs

  • In the other precious metals, the spot silver price was down $0.072 at $16.365-16.410 per oz. Platinum decreased $2.0 to $923.0-928.0 per oz, and palladium climbed $12.0 to $861.0-866.0 per oz.
  • On the Shanghai Futures Exchange, gold for December delivery was recently at 274.70 yuan ($40.67) per gram, while the December silver at 3,863 yuan per kg.

Currency moves and data releases

  • The dollar index was up 0.05% at 94.09 as of 05:13 BST.
  • In other commodities, the Brent crude oil spot price was up 0.8% to $50.6 per barrel, and the Texas light sweet crude oil spot price rose 1.02% to $48.38.
  • In equities, the Shanghai Composite was down 0.12% to 3,239.84.
  • In US data, house prices rose 0.4% in May, down from a downwardly-revised 0.6% in the previous month, CB consumer confidence was up from the previous 118.9 to 121.1 and the Richmond manufacturing index was up to 14.0 for July from 7.0 previously.
  • Today, the UK’s preliminary gross domestic product is due, while US data includes new home sales and crude oil inventories, the FOMC’s statement and federal funds rate decision.