💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

PRECIOUS-Gold near 12-wk top as dollar slips ahead of Fed statement

Published 27/01/2016, 05:43 pm
© Reuters. PRECIOUS-Gold near 12-wk top as dollar slips ahead of Fed statement
XAU/USD
-
XAG/USD
-
GC
-
SI
-
PA
-
PL
-
GLD
-
DXY
-

* Fed expected to keep rates unchanged, cite gloomy global outlook

* Dollar weaker versus currency basket, Asian stocks subdued

* SPDR Gold holdings at highest since November

* Coming Up: Federal Reserve releases statement; 1900 GMT (Updates prices)

By Manolo Serapio Jr

MANILA, Jan 27 (Reuters) - Gold beamed near a 12-week peak on Wednesday, supported by a softer dollar as investors awaited the outcome of the Federal Reserve's first policy meeting of the year.

The U.S. central bank is widely expected to keep key rates unchanged at the conclusion of its two-day meet later in the day, but investors are keen on what policymakers have to say about global economic headwinds from China to Europe.

Expectations for a rate increase at the Fed's next meeting in March are receding as growth risks rise, which should boost the price of non-interest bearing gold.

"The world's economic condition doesn't seem to give the Fed reason to hike rates soon given the growth risks," said Barnabas Gan, analyst at OCBC Bank in Singapore.

Spot gold XAU= was flat at $1,119.46 an ounce by 0630 GMT, not far below Tuesday's peak of $1,122.90, its strongest since Nov. 3.

With risk aversion intact as global growth concerns persist, "I won't be surprised if gold hits $1,150, even $1,200 in the first quarter", said Gan.

Gold's safe-haven appeal is back in vogue this year amid falling equities and oil prices, lifting spot bullion nearly 6 percent so far this month. Gold dropped 10.4 percent in 2015.

U.S. gold for February delivery GCcv1 was little changed at $1,120 per ounce.

The dollar was lower versus a basket of currencies .DXY as investors looked to the Fed's statement due out at 1900 GMT. Asian stocks held near the day's lows. MKTS/GLOB

Reflecting rising confidence in gold, holdings of SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, stood at 21.52 million ounces on Tuesday, the highest since Nov. 5. GOL/ETF

China's net gold imports for December via main conduit Hong Kong surged to the highest in more than two years, data showed on Tuesday, as investors lost faith in collapsing stock markets and a weakening currency. has taken advantage of low gold prices and an equity market rout to stock up on gold assets," said Helen Lau, analyst at Argonaut Securities.

Lau expects China's gold imports to remain strong due to a seasonal demand surge ahead of the Lunar New Year holiday in February.

Spot silver XAG= slipped 0.3 percent to $14.46 an ounce, platinum XPT= gained 0.4 percent to $877.70 and palladium XPD= was steady at $491.70.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.