BackGold rebounds from lowest level since January before Fed meeting
Bullion for immediate delivery rose as much as 0.4% to $1,235.07 an ounce and traded at $1,233.67 by 11:58 am in Singapore
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Singapore: Gold rallied from an eight-month low, snapping three days of losses, on speculation that reduced prices may spur purchases before the Federal Reserve begins a two-day policy meeting.
Bullion for immediate delivery rose as much as 0.4% to $1,235.07 an ounce and traded at $1,233.67 by 11:58 am in Singapore, according to Bloomberg generic pricing. The metal dropped earlier to $1,225.67, the lowest since 9 January. The 14-day relative-strength index held below the level of 30 for a third day on Monday, signalling that prices may be poised to rebound.
Gold is heading for the first quarterly loss this year as the Bloomberg Dollar Spot Index climbed 4.7% since the end of June. The precious metal halted a 12-year rally in 2013 on expectations the Federal Reserve will reduce monthly asset purchases, which it has done six times. The Fed begins a two-day policy meeting tomorrow after data on 13 September showed retail sales rose in August by the most in four months.
“While some buying interest may emerge at lower levels, gold continues to be under pressure from the dollar’s strength," said Yang Xi, a Hangzhou, China-based analyst at Yongan Futures Co. “The possibility of the Fed raising interest rates sooner is high, and investors will be closely watching the meeting this week."
China’s industrial output rose at the weakest pace since the global financial crisis, 13 September data show, adding to concern that bullion demand may slow in the largest user as the economy loses momentum. Volumes for the benchmark spot contract in Shanghai retreated to a one-week low on 12 September. In India, the second-biggest user, imports may drop below 350 metric tonnes in the second half of the year as curbs continue, according to Edelweiss Financial Services Ltd.
Bullion holdings
Gold for December delivery increased 0.2% to $1,234.30 an ounce on the Comex in New York, after earlier falling to $1,226.30, the lowest for a most-active contract since 9 January. Investors reduced bullish bets on the metal for a fourth straight week to 71,376 contracts, the lowest since June, Commodity Futures Trading Commission data show. Holdings in the SPDR Gold Trust, the biggest bullion-backed exchange-traded product, last week snapped two weeks of contraction.
Spot silver rose 0.2% to $18.6702 an ounce after prices declined on 12 September to $18.4675, the lowest since June 2013. Platinum was at $1,369.81 an ounce from $1,371.63 on 12 September, when prices retreated to $1,355.88, the lowest this year. Palladium climbed 0.5% to $841.65 an ounce after the metal dropped on 12 September to $821.35, the lowest since June. Bloomberg
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