Gold price steady but upside limited ahead of FOMC meeting

The gold price was steady during Thursday December 8 trading as the dollar weakened. But participants said that it may struggle on the upside ahead of the USA FOMC meeting.

The Fed is widely expected to raise rates at its meeting on December 14, particularly after a run of positive data from the country, “which either means it is (arguably) already built into the price or else people have forgotten how uncertain 2016 has already proved to be”, Marex Specton said in a note.

The spot gold price was recently quoted at $1,176.25/1,176.55 per oz, up $1.90 on Wednesday’s close.

The metal has fallen around 12% from its peaks following Donald Trump’s election victory in the US, Marex Specton added.

Still, the dollar index has been drifting in recent sessions – it was recently at 99.94, down 0.2%.

“As global equity markets continue to trade bid and ETFs redeem the metal, it’s difficult to see gold testing toward $1,200 leading into the FOMC meeting next week; however, underlying support continues to restrict down-side moves below $1,160,” MKS said.

Attention now turns to today’s ECB meeting. Market consensus is for its asset purchase programme to be extended by six-nine months. In data today, the key focus will be US unemployment claims, which are forecast at 258,000.

The spot silver price at $17.095/17.130 per oz was down $0.02. Platinum at $945/925 per oz was up $9 while palladium edged $1 higher to $730/735 per oz.

(Editing by Mark Shaw)

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