Gold hovers near five-week high as Fed policy meeting looms
Quotes

Gold hovers near five-week high as Fed policy meeting looms

Last Updated: Monday, October 28, 2013, 09:39
 
 Comment 0
 
Gold hovers near five-week high as Fed policy meeting looms
Singapore: Gold was hovering near five-week highs on Monday as traders bet the US Federal Reserve would stick with its bullion-friendly stimulus measures at a policy meeting later this week.

Bullion has fallen nearly 20 percent this year as investors dumped gold holdings for better-performing stock markets and on fears that the end of easy money from the US central bank would dim the metal`s inflation-hedge appeal.

In the past two weeks, however, gold has gained about 6 percent as weak US data and budget battles in Washington looked set to deter the Fed from scaling back asset purchases.

"We believe the tapering will definitely be delayed and that`s positive for precious metals," said Brian Lan, managing director of GoldSilver Central Pte Ltd. "Gold prices will close above USD 1,400 by the end of the year."

Spot gold was down 0.1 percent at USD 1,350.41 an ounce by 0314 GMT. On Friday, it touched USD 1,355.20, its highest since September 20.

Platinum gained as much as 0.7 percent on fears that strikes in South Africa could curb supply.

The Fed`s policy-setting committee will release a statement on its decision on Wednesday at the end of a two-day meeting.

The central bank is unlikely to make any shift in monetary policy this week and will continue to buy back bonds at an USD 85 billion monthly rate as it waits for more evidence of how badly Washington`s budget battle has hurt the economy.

Traders are also closely monitoring physical demand in Asia, the biggest consumer of gold, where demand has become subdued following a big rush earlier this year.

"Physical demand is quiet because of higher prices. The only market that is buying is India," said Lan.

Premiums in India jumped to a record high of USD 130 an ounce last week as government restrictions on gold imports squeezed supply during the peak holiday season.

India, where gold is considered auspicious and is bought during weddings and festivals, celebrates Diwali and Dhanteras festivals in early November.

In China, premiums on the Shanghai Gold Exchange fell into negative territory on Monday although they recovered later to about USD 1 an ounce. Premiums were as high as USD 30 in April-May.

A dealer in Hong Kong said higher prices were prompting some consumers to sell.



Reuters

First Published: Monday, October 28, 2013, 09:39


Comments


comments powered by Disqus
John Kery with Indian Biz Honchos
John Kery with Indian Biz Honchos
Honda Mobilio MPV
Honda Mobilio MPV
BRICS Annual Summit 2014
BRICS Annual Summit 2014
Tata Zest Standout Features: In Pics
Tata Zest Standout Features: In Pics
New car launches in July
New car launches in July

Web Wrap
Contact Us : Privacy Policy : Legal Disclaimer
Copyright © Zee Media Corporation Ltd. All rights reserved