Gold Rebounds From Eight-Week Low On Expectations Of Fed Stimulus-Taper

Precious-Gold rebounded from two-month low on Wednesday on rising expectations the Fed would delay its plans to unwind stimulus, thereby enhancing demand on the metal as a hedge against inflation.

Gold is currently trading around $1316.47 an ounce after hitting a high of $1323.51 and a low of $1277.78, where the breach of resistance at $1300 has paved the way to metal to rebound.

The trading range for today is expected to be between key support at $1260 and key resistance at $1337.

The shiny metal rebounded today after incurring a sharp 3 percent loss in the previous session on expectations the Fed would delay any plans to withdraw its monthly bond buying, as the government shutdown would hurt economic recovery.

Concerns remained in markets as the shutdown entered its second day ahead of another attempt on Wednesday to break the conflict between Democrats and Republicans by approving a federal budget for 2014.

The shutdown may cost the U.S. as much as $300 million a day, which in turn could shave 0.9% off fourth quarter GDP.

A report released today from the U.S. added to concerns as it signaled private-sector employers added fewer than forecast jobs in September.

Hence, the policymakers may be prompted to delay their intended plans to cut their bond purchases this month or before the end of this year.

On the other hand, commodities benefited from the drop in the U.S. dollar, which plummeted for a fourth straight session against a basket of major currencies on shutdown woes. The dollar index plunged to a low of 79.86 from a high of 80.39.

Crude oil for November's delivery rebounded to $103.52 a barrel after touching a low of $101.42.

Among other precious metals, sliver edged up $21.65 from the session's opening of $21.05, platinum surged to $1390.25 from $1383.85, and palladium soared to $718.50 from $714.65.