FRX: Gold futures flat near 6-week low ahead of Fed FOMC decision
Forexpros - Gold futures were little changed during U.S. morning trade on Wednesday, holding near the previous session’s six-week low as market participants looked ahead to the conclusion of the Federal Reserve's two-day policy-setting meeting later in the day.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,709.65 a troy ounce during U.S. morning trade, unchanged on the day.
Prices held in a tight trading range of USD1,715.15 a troy ounce, the session high and a daily low of USD1,706.55 a troy ounce. On Tuesday, gold prices touched USD1,704.75 a troy ounce, the cheapest level since September 7.
Gold prices were likely to find support at USD1,688.85 a troy ounce, the low from September 7 and resistance at USD1,731.25, the high from October 22.
Gold traders are turning their attention to the Fed’s policy meeting later in the day, after the central bank vowed last month to buy an average of USD40 billion of mortgage-backed securities a month until the economy shows significant improvement.
While the central bank was not likely to introduce any new measures, its policy statement will be closely scrutinized.
Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would pump more money into the financial system.
Gold prices swung between small gains and losses throughout most of the day, as encouraging Chinese data offset weak data out of the euro zone.
Markit said that its flash euro zone manufacturing purchasing managers’ index fell 45.3 in October from a final reading of 46.1 in September. Analysts had expected the index to ease up to 46.6 in October.
Germany’s flash manufacturing PMI fell to 45.7 in October, from a final reading of 47.4 in September, disappointing expectations for an improvement to 48.0.
Meanwhile, a report by German research institute Ifo showed that its business climate index fell to100.0 in October, the lowest level since March 2010, from a reading of 101.4 in September.
Elsewhere, data showed that China's HSBC manufacturing PMI came in at 49.1 in October, compared with a final reading of 47.9 in September.
From a technical standpoint, the precious metal could see further losses in the near-term after having failed to break above the key USD1,800-level earlier in the month.
Gold futures rallied to an 11-month high of USD1,798.05 a troy ounce on October 5, boosted by ongoing expectations policymakers around the world will launch more stimulus to support the weak global economy.
Elsewhere on the Comex, silver for December delivery rose 0.1% to trade at USD31.81 a troy ounce, while copper for December delivery shed 0.4% to trade at USD3.554 a pound.
