Gold Edges Down In Asia With Market Awaiting Fed Next Week

Investing.com – Gold prices eased slightly in Asia on Thursday with the market awaiting comment from the Fed at next week’s review of policy and any language on what looks like a US tax cut package passed before the end of the year.

for February delivery on the Comex division of the New York Mercantile Exchange slipped 0.03% to $1,265.70 a troy ounce.

Elsewhere, Middle East tension rose as President Donald Trump breaks with decades of US foreign policy, saying he’s directing the State Department to begin preparations to move the U.S. Embassy in Israel from Tel Aviv to Jerusalem.

Benjamin Netanyahu says in a statement that Israel is “profoundly grateful” and that Trump’s announcement is an “important step toward peace.” Saudi Arabia called for an immediate review of the decision and said there could be dangerous consequences.

Overnight, gold prices hovered above six-week lows on Wednesday as dollar strength continued after uncertainty over a possible US government shutdown eased, reducing investor demand for safe-haven gold.

Gold prices struggled to hold onto gains as fears over a possible government shutdown eased amid reports that the GOP leadership in the House and Senate want to pass a bill that would extend the government shutdown deadline to Dec. 22 from Dec. 8.

Trump said he would sign a stop-gap measure if passed.

Expectations for Congress to pass a funding bill stoked sentiment on the greenback as it remained close to session highs, pressuring gold to give up early session gains.

Gold is sensitive to moves higher in U.S. dollar – A stronger dollar makes gold more expensive for holders of foreign currency, thus reduces demand for precious metal.

Also weighing on the gold was ongoing expectations that the U.S. Federal Reserve will raise interest rates for third time this year at the conclusion of its next meeting on Dec.13.

According to 100% of traders expect the Federal Reserve to raise rates in December.

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