Gold trades above two-week low before Fed Meeting as SPDR sinks
By Bloomberg
Gold held above a two-week low as investors assessed the health of the U.S. economy before the Federal Reserve concludes a policy meeting. Russia joined Turkey in adding bullion to reserves as assets in the largest exchange- traded product sank to the lowest in six years.
Bullion for immediate delivery rose and fell at least 0.2 percent, and traded at $1,230.27 an ounce by 3:10 p.m. in Singapore from $1,228.52 yesterday, according to Bloomberg generic pricing. The metal dropped to $1,222.62 yesterday, the lowest price since Oct. 15, before rebounding as U.S. data showed durable goods orders unexpectedly declined, sending the Bloomberg Dollar Spot Index to a one-week low.
Fed officials are weighing the timing of rate increases, with traders cutting bets that the central bank will raise borrowing costs by October 2015 to a 50 percent chance from 79 percent on Sept. 30. The Fed said in September it planned to end asset purchases this month if the economy keeps improving and has held its key rate at zero to 0.25 percent since 2008.
"U.S. economic data remains mixed, keeping investors on the sidelines before the Fed meeting," said Lv Jie, an analyst at Cinda Futures Co. in Hangzhou, China, wrote in a note today. "Physical demand is quite good, lending some price support."
Gold for December delivery traded at $1,230 an ounce on the Comex in New York from $1,229.40 yesterday, when futures dropped to $1,222.20, the lowest since Oct. 15.
Assets in the SPDR Gold Trust, the biggest bullion-backed ETP, shrank to 743.59 metric tons yesterday, the least since October 2008. Russia and Turkey were among nations that added gold to their reserves in September as Mexico reduced holdings, data on the International Monetary Fund website showed.
Silver for immediate delivery climbed 0.2 percent to $17.2542 an ounce. Spot platinum rose 0.5 percent to $1,272.74 an ounce. Palladium advanced 0.6 percent to $798.17 an ounce after a four-day increase.