BS: Gold Falls Before Federal Reserve Meeting as Stronger Dollar Saps Demand
Gold may fall in New York before a Federal Open Market Committee meeting and as Greece prepares to receive a second bailout. Platinum rose above gold for a second day.
The best six months of job gains since 2006 have helped reduce the odds of a third round of asset purchases by the U.S. Federal Reserve, according to a Bloomberg News survey. Bullion had the biggest one-day decline since 2008 on Feb. 29 after Fed Chairman Ben S. Bernanke gave no signal of a third round of quantitative easing, or QE3, sending the dollar higher. The dollar gained today against a six-currency basket including the euro and yen.
“The FOMC will be important, after the market interpreted Bernanke’s recent silence on QE3 as an indication that it was unlikely to happen,” said Nic Brown, an analyst at Natixis Commodity Markets Ltd. in London. “The gold market will be hanging on his every word tonight.”
Gold futures for April delivery were down 0.8 percent at $1,686.70 an ounce by 9:15 a.m. on the Comex in New York. Gold for immediate delivery fell 0.9 percent to $1,686.23 an ounce.
Euro-area finance ministers yesterday signed off on a second Greek bailout and will give formal approval tomorrow, a day before the International Monetary Fund board votes on its contribution.
FOMC Statement
The FOMC plans to release a statement at about 2:15 p.m. in Washington after its meeting on rates. The U.S. dollar strengthened as much as 0.3 percent against the euro and as much as 0.1 percent against the six-currency basket. Gold typically moves inversely to the greenback.
“Investors continue to watch the dollar rate, waiting on the sidelines while many are concerned about an even stronger dollar rebound,” Andrey Kryuchenkov, a London-based analyst at VTB Capital, wrote in a report today.
Gold assets in exchange-traded products rose to a record 2,408.981 metric tons yesterday, and are up 2.2 percent this year, according to data compiled by Bloomberg. Holdings in exchange-traded products backed by platinum climbed 8.2 percent this year, compared with a 2.8 percent gain in silver ETPs.
Platinum prices climbed above gold for the first time since September yesterday on concern that production in South Africa is declining amid improving global auto sales. One ounce of platinum bought as much as 1.0032 ounces of gold today, the most since Sept. 19, according to data compiled by Bloomberg. The ratio was last at 1.0002.
Platinum for April was little-changed at $1,696.20 an ounce. The price has gained 21 percent this year and has tied with silver as the best-performing precious metal.
Silver for May delivery was up 0.5 percent at $33.565 an ounce. Palladium for June delivery was down 0.5 percent at $700.70 an ounce.
To contact the reporter on this story: Maria Kolesnikova in London at mkolesnikova@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
