Gold price hovers around 2-wk lows, investors awaits FOMC meeting

Gold edged lower on Friday morning in London trading to around its weakest in two weeks while investors prepare for the Federal Reserve’s September meeting from next Tuesday.

– The spot gold price was last at $1,313.55/1,313.90 per ounce, down $2.30 on the previous close. Trade has ranged from $1,313.15 to $1,318.15 so far.

– “[Thursday’s] soft data out of the US has further reduced the chances that the FOMC will hike rates at next week’s meeting; however, gold continues to struggle to garner support for a move back above $1,330,” MKS noted.

– The Fed funds futures market does not expect a single rate increase for 2016, according to the CME Group FedWatch tool. On Thursday, the probability for a move in September was just 12 percent, November was 19.3 percent and December was 46.2 percent. Earlier this week, a majority expected a rate rise in December.

– US data due later today includes the CPI, he core CPI, preliminary UoM consumer sentiment and preliminary UoM inflation expectations.

– “For gold we remain bullish overall but, given the extended long position and the drift lower in prices, there may well be room for more stale long liquidation. That could lead to a sell-off, even if it is short-lived and limited,” FastMarkets head of research William Adams said.

– In the other precious metals, silver was last little changed at $18.935/18.955 per ounce. Platinum at $1,026/1,032 was just $1 lower and palladium at $650/657 was down $1.50.

(Editing by Mark Shaw)

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