Gold prices in early trading in Asia on Tuesday recovered from a low of 2 weeks, as investors weigh increase in physical demand ahead of policymakers at the Federal Reserve begins a two-day meeting wherein it is hoped terminate a bond purchase program.
Comex gold futures for delivery in December quoted at $ 1,225.80 a troy ounce, down 0.06%, after hitting a session low during the night of $ 1227.50 and off a high of $ 1232.00. During the night the prices of gold drop earlier because investors prevent the yellow metal sprang to the sidelines ahead of Fed declaration on monetary policy on Wednesday.
Spot Gold for prompt delivery rallied as much as 0.5 percent to $ 1232.40 an ounce and was trading at $ 1231.32 in Singapore. The metal fell earlier to $ 1222.62, the lowest price since October 15, and has retreated 1.8 percent in the past four days in the longest losing run since August.
“Pressure is released in the domestic market on gold. Business is extremely sluggish in the international market. Indeed, a crucial meeting of FOMC going to start today’s, in which bond-buying program can be entirely eradicated. In the US, interest rates may be somewhat clearer picture. With slight weakness of 0.1 per cent on MCX gold is trading below Rs 27,200. While silver is trading up 0.2 per cent to Rs 38,200.” said 100McxTips.
Gold fell 6.2 percent last month as the dollar gained and shares in exchange-traded products was contracted. Fed policy makers are evaluating the schedule of rate hikes after yesterday’s data showed that the number of contracts to buy existing homes increased by less than anticipated in September. Demand in China and India, the biggest shoppers usually accelerates in the fourth quarter during the festive period and wedding season.
Holdings in the SPDR Gold Trust remained flat yesterday after shrinking to a minimum of six years on October 24.
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