Gold steadied on Wednesday as traders awaited Federal Reserve minutes later in the day and an opinion poll ahead of next week’s Swiss gold referendum, with dollar strength pulling prices back from near three-week highs. The dollar hit a fresh seven-year high against the yen on Wednesday as investors added favourable bets before the publication of Federal Reserve minutes that could highlight policy divergence with its peers.
Traders will be looking for clues on when the Fed will raise rates as any increase could hurt non-interest-bearing gold. Spot gold was at $1,197.50 an ounce at 1455 GMT, little changed from Tuesday, while US gold futures for December delivery were down 30 cents an ounce at $1,196.80. On Tuesday gold peaked at $1,204.70, its highest since October 30, having slid to a 4-1/2 year low of $1,131.85 this month.
“With further weakness in the yen or euro against the dollar, we could well see gold having an uphill struggle,” Mitsubishi analyst Jonathan Butler said. “A lot will be revealed in this afternoon’s minutes from the FOMC. We’ll see the strength of hawkishness that was prevalent in the last meeting.” “Going forward, it’s very much going to depend on the outlook for the US economy, and the pace of monetary policy tightening.” Speculation is also building over Switzerland’s gold holdings ahead of the November 30 vote on a proposal that would force the Swiss National Bank (SNB) to hold at least 20 percent of its assets in gold.
A opinion poll due for release on Wednesday will show if support for the measure has continued to decline from around 44 percent hit last month. The chairman of the Swiss central bank said in an interview earlier this month that a vote in favour of the motion, which would also oblige the SNB to repatriate gold holdings and end all sales, would be disastrous for the country. Silver was up 0.6 percent at $16.27 an ounce. GFMS analysts at Thomson Reuters said on Tuesday that silver demand would fall 7 percent in 2014 because of a slower pace of buying by jewellers and industrial fabricators. Spot platinum was down 0.3 percent at $1,197.75 an ounce, while spot palladium was up 0.7 at $776.22 an ounce.
Source: Reuters
Source: Bullion Bulletin