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Gold edges down as investors wait for Fed policy decision
On Wednesday, gold moderately declined ahead of the latest monetary policy update from the Fed that could potentially confirm a marathon of higher interest rates, which could back the evergreen buck and dull appetite for gold.
December delivery gold futures headed south by 0.2% being worth $1,231.10 an ounce, just a day after the number one precious commodity marked the first revenue in four trading sessions.
At the same time, September delivery silver futures lost 0.6% hitting $15.460 an ounce, having concluded July nearly 3.9% lower.
Among other precious commodities, platinum futures went down about 3.04% ending up with $820.00. As for palladium futures, they inched down approximately 1.48% being worth $915.30 an ounce. Additionally, copper futures tumbled 2.88% hitting $2.750 a pound.
Wednesday’s dip in the metal’s price actually follows a moderate ascend in benchmark bond profits as well as a modestly stronger greenback. These factors are capable of undercutting appetite for precious commodities. Higher rates simply make gold less attractive than US Treasuries. On the other hand, a stronger greenback makes dollar-pegged assets less affordable for purchasers utilizing other currencies.
As a matter of fact, the benchmark 10-year Treasury note approached the psychologically crucial mark of 3%. At the same time, the evergreen buck, gauged by the ICE U.S. Dollar Index, managed to tack on by up to 0.1% during the early trading session.
The Fed’s highly anticipated policy update is going to be uncovered soon. The key US financial institution is expected to confirm its intention to have interest rates lifted a further two times this year.
By the way, the Federal Open Market Committee isn’t going to come up with fresh economic projections, while Chairman Powell isn’t going to hold a news conference after the FOMC statement.
Canada’s retail sales will be out on October 21 at 15:30 MT time. Get ready with us for this event!
The market is resilient ahead of the speeches of Fed’s Powell and ECB President Lagarde, but there are still interesting movements.
The uncertainty over US fiscal stimulus and Brexit, and also rising new virus cases deteriorated the market mood. That’s why we can expect the further rally of the US dollar and the fall of riskier assets today.