14.3 C
New York
Tuesday, May 17, 2022

Gold hits three-week low as nerves build before Fed decision

NEW YORK: Gold prices slid to their weakest level since mid-October on Wednesday, as investors feared the Federal Reserve might signal a faster-than-expected tapering of its pandemic-era stimulus measures at the end of its policy meeting.

Spot gold was down 1.3% at $1,763.56 per ounce by 13:22 EDT (1722 GMT), after earlier touching $1,757.63, its lowest since Oct. 13. U.S. gold futures fell 1.5% to $1,762.10.

The Fed is expected to announce the tapering of its $120 billion-a-month asset purchase program in its policy statement at 1800 GMT.

“We may be seeing some pre-FOMC positioning, the fear being that policymakers will be more hawkish than markets anticipate,” OANDA analyst Craig Erlam said.

Another bearish signal for gold was data showing U.S. private payrolls increased more than expected in October, suggesting the labor market and overall economy were regaining momentum early in the fourth quarter.

Upbeat payrolls data could mean a better-than-expected jobs report on Friday, and that could lend weight to the case for a faster hike in interest rates, said David Meger, director of metals trading at High Ridge Futures.

Ultra-loose U.S. monetary policy has helped drive gold sharply higher since the financial crisis of the late 2000s, with low interest rates cutting the opportunity cost of holding non-yielding assets and inflation fears stoking demand for a hedge. Market participants are also eyeing a Bank of England policy meeting on Thursday after recent data bolstered chances for a rate hike.

Silver tumbled 1.6% to $23.14 per ounce, platinum fell 1.6% to $1,021.15 and palladium declined 1% to $1,991.23.

Gold hits three-week low as nerves build before Fed decision

Source: Brecorder

Related Articles


Please enter your comment!
Please enter your name here

Stay Connected

- Advertisement -

Latest Articles

Popular Articles