Gold price up on weaker dollar, focus on central bank decisions

Gold prices climbed on Monday morning in London, with the dollar weakening ahead of the US Federal Open Market Committee (FOMC) and Bank of Japan (BoJ) meetings this week.

– The spot gold price was last at $1,317.10/1,317.50 per ounce, up $7.30 on the previous close, with trade ranging from $1,309.45 to $1,318.55 so far. The dollar index was last weaker at 95.87.

– A two-day US Federal Reserve meeting will conclude on Wednesday. Most market participants so not anticipate a rte rise in September although the probability of this taking place in December has increased after better-than-expected inflation data last Friday.

– “This might just mean we get a bigger relief rally in the face of the ‘no change’ that we and most of the market expects [on] Wednesday night. A rise in rate would be a major market shock,” National Australia Bank said.

– The Bank of Japan will also hold its monetary policy meeting on Wednesday; while the market expects fresh easing measures, uncertainty remains over what path it will take.

– “Precious metals have been under pressure of late but they did find some buying this morning that suggests scale-down buying remains strong,” FastMarkets’ William Adams said. “The PGMs have also found buying from lower prices. Wednesday’s central bank statements and decisions are likely to provide the next direction for gold; the markets are likely to remain nervous until then. We remain bullish over the medium term but, with prices testing support, they remain vulnerable in the short term.”

– In the other precious metals, silver was up around 40 cents at $19.125/19.180 per ounce. Platinum at $1,027/1,033 was $15 higher and palladium at $674/683 was up $8.50.

(Editing by Mark Shaw)

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