Gold rises while awaiting FOMC outcome; Support holds
NEW YORK (Scrap Register): Gold has been underpinned by renewed geopolitical tensions during the last 24 hours and the market now turns its attention to the conclusion of a meeting of the U.S. Federal Open Market Committee on Wednesday afternoon, said Sam Laughlin, senior precious-metals trader with MKS (Switzerland) S.A.
“After once again seeing solid underlying interest above $1,300 on Tuesday, bullion pushed modestly higher during Asian trade today as participants positioned (or un-positioned) themselves into the upcoming FOMC announcement," Laughlin added.
“A softer U.S. dollarduring late New York trade Tuesdaysaw gold bounce off the recent $1,305-$1,310 support level, closing toward the session high print to decouple somewhat from rising U.S. Treasury yields following President Trump's tough rhetoric toward North Korea at the U.S. General Assembly,"Laughlin noted.
Buying interest in gold emerged around $1,310 during Asian trading overnight. Expectations are that bullion will hold the recent $1,305-$1,315 range leading into today's FOMC announcement, with the broader market searching for details regarding the Fed's balance-sheet normalization in addition to the timing of interest-rate increases.
“The key for the yellow metal is still the $1,300 support level and should Fed Chair Janet Yellen stick to the expected script today, we should see the figure hold with underlying geopolitical risks remaining,"Laughlin added.