NVDA Q3 Earnings Alert: Why our AI stock picker is still holding Nvidia stockRead More

PRECIOUS-Gold range-bound as focus shifts to Fed policy decision

Published 27/01/2021, 03:16 pm
© Reuters.
XAU/USD
-
XAG/USD
-
GC
-
SI
-
PA
-
PL
-

* Ultra-dovish views from Powell can boost gold to $1,880 -analyst

* Global coronavirus cases surpass 100 million

* Interactive graphic tracking global spread of coronavirus: https://tmsnrt.rs/3mvcUoa (Updates prices)

By Sumita Layek

Jan 27 (Reuters) - Gold traded in a narrow range on Wednesday as market participants awaited the U.S. Federal Reserve's monetary policy decision and developments around a coronavirus stimulus package in the world's largest economy.

Spot gold XAU= was down 0.1% to $1,848.60 per ounce by 0744 GMT. U.S. gold futures GCv1 eased 0.2% to $1,846.60.

"Gold appears to be in a holding pattern as investors are waiting for the Fed," said Jeffrey Halley, a senior market analyst at OANDA.

The U.S. central bank is expected to stand pat on policy when it announces its decision at 1900 GMT. Investors will be watching for comments from Fed Chairman Jerome Powell for clues on the state of the economy.

"If Powell remains ultra-dovish and indicates they have no intention of tapering, that can boost gold up to $1,880, although if he sounds optimistic about the economic recovery, gold can touch near $1,800 levels," Halley said.

Easy monetary policy adds pressure on government bond yields and benefits non-yielding gold.

Also in focus was U.S. President Joe Biden's $1.9 trillion stimulus plan, which has been met with objections from Republicans over the price tag. new round of fiscal stimulus may not arrive before mid-March, which is later than what the market had expected... so eventually we may see a delayed and smaller stimulus, which is not good for gold," said DailyFX strategist Margaret Yang.

Gold will trade range-bound between $1,810 and $1,870 in the near term, Yang said, adding that in the medium term, the economic recovery might push yields higher along with inflation, which would be bearish for bullion.

Lending some support to gold were worries over a surge in global coronavirus cases, which surpassed 100 million, as countries struggle with vaccine shortfalls. XAG= fell 0.3% to $25.37 an ounce, platinum XPT= shed 0.7% to $1,091.01 and palladium XPD= eased 0.4% to $2,316.60.

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.