PRECIOUS METALS held in a tight range in London on Tuesday morning, moving sideways as world stock markets rose and commodities slipped ahead of the US Federal Reserve meeting, which begins today.
“No outstanding features, volumes fairly light and very little to report,” says broker Marex Spectron.
After telegraphing its intention to start reducing the $85 billion in monthly quantitative easing as soon as September, the Fed will announce its latest policy on Wednesday, soon after the release of official US data for second-quarter GDP.
Gold moved on Tuesday morning barely $4 per ounce above $1322 – the “crash” low of mid-April.
Silver moved just 0.7% around $19.70 per ounce.
“We could see some downside open up,” says Standard Bank’s commodities team, “if the Fed announces tomorrow that it will stay the tapering course.”
Looking at recent bullion price action, “Gold is pushing hard” says technical analysis from Commerzbank “into the 2-month downtrend and the 55-day moving average at $1333/40.”
Gold bullion and futures prices “reacted violently in June” Federal Reserve comments on policy, says a note from Bank of America-Merrill Lynch. But now “near-dated gold volatility has been falling in recent weeks. ...