Gold near 3-month low on dollar, investors await Fed
Gold extended losses, hovering near a three-month low, after the dollar surged against the euro, prompting investors to liquidate some of their holdings.
Gold dropped to $871.85/872.85 an ounce from $873.55/874.75 an ounce late in New York on Tuesday, when it tumbled to $868.20 an ounce, its lowest since late January, on a combination of a rise in the dollar and a fall in oil.
Gold has lost more than 15% in value since spiking to a record high at $1,030.80 on March 17. The drop has attracted physical buying from jewelers, which may offer support for gold, at least for now, said dealers.
“I'd suggest we're probably looking at a range for about $868 as the next support, with that resistance now at the $875 level,” said Darren Heathcote of Investec Australia in Sydney.
“There's been physical buying around. I'd suggest that given that we are $60 or so lower than we were about a week ago, it would have spurred some physical buying, thinking there's a possibility of a further bounce.”
The Federal Open Market Committee will unveil its decision on Wednesday, when it is expected to cut rates by a quarter percentage point to 2%, which would take its total rate slashing over the past seven months to 3.25 percentage points.
“We've seen selling in Japan, and it looks gold will head lower again but everything really depends on the FOMC decision,” said a dealer in Hong Kong.
“Maybe support will be around $870 in Asia,” he said.
Gold futures for June delivery on the COMEX division of the New York Mercantile Exchange fell $3.5 an ounce to $873.1 an ounce.
The dollar barely changed at ÂĄ104.05, while the euro was flat at $1.5570, holding near a one-month low of $1.5540 hit the previous day.
Spot platinum fell to $1,914/1,924 an ounce from $1,918/1,938 late in New York.
Most active Tokyo platinum futures fell ÂĄ250 per gram to ÂĄ6,200.
Silver edged down to $16.49/16.56 an ounce from $16.51/15.59 an ounce. Spot palladium inched down to $420/428 an ounce from $421/429 an ounce. (Reuters)
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