Gold price edges lower but marks time ahead of FOMC meeting

Gold edged lower on Thursday morning in London and is generally marking time ahead of next week’s FOMC meeting.

– The spot gold price was last at $1,319.00/1,319.30 per ounce, down $3.50 on Wednesday’s close. Trade has ranged from $1,318.65 to $1,325.75 so far.

– Investors are preparing for the Federal Reserve to start its September meeting next Tuesday; the closely watched Federal Open Market Committee’s statement will be released on the afternoon of September 21.  Over the past two weeks before a media blackout, Fed members have given mixed messages on growth, the global economy and the removal of accommodative policy.

– Market participants see the odds of a September rate increase at just 15 percent, according to the CME Group FedWatch tool. Most now see an increase only in February next year, later than consensus of December a day ago.

– “The gold market is on the defensive. It has remained under pressure despite the clear and marked reduction in market expectations of a US rate hike later this month. All other things being equal, a decline in rate hike expectations should be bullish for gold,” HSBC analyst James Steel said.

– A string of US data is due later today including core retail sales, the PPI and the core PPI, the Philly Fed manufacturing index, retail sales, unemployment claims, the current account, the Empire State manufacturing index, the capacity utilisation rate, industrial production and business inventories.

– In the other precious metals, silver was last little changed at $18.905/18.925. Platinum edged $1 lower to $1.029/1.035 but palladium at $650/657 was $2.50 higher. Platinum Week events are taking place in New York, which may be robbing the market of some trading volume, Steel noted.

(Editing by Mark Shaw)

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