Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Gold steady to higher in Asia as investors await word from the Fed

Published 09/15/2015, 09:07 PM
Updated 09/15/2015, 09:08 PM
Gold prices steady to higher in Asia

Gold prices steady to higher in Asia

Investing.com - Gold prices were steady to higher in Asia on Wednesday as investors stand pat ahead of a a possible move by the Federal Reserve this week to raise interest rates.

On the Comex division of the New York Mercantile Exchange, gold for December delivery traded up 0.14% to $1,104.10 a troy ounce, while silver gained 0.10% to $14.340 a troy ounce.

Copper for December delivery fell 0.10% to 2.425 a pound.

Overnight, gold futures fell mildly on Tuesday erasing slight gains from one session earlier, as metal traders remained cautious ahead of a critical two-day Federal Open Market Committee meeting beginning on Wednesday.

For the second consecutive session, investors appeared hesitant to make any major moves before the FOMC issues a closely watched statement on Thursday, where it could raise its benchmark Federal Funds Rate for the first time in nine years. The rate, which banks use to lend to other institutions on overnight loans, has remained at its current level between zero and 0.25% since December, 2008.

Prior to the announcement, the U.S. Department of Labor's Bureau of Labor Statistics will release its Consumer Price Index for the month of August on Wednesday morning. After ticking up by 0.1% in July, the headline reading is expected to remain flat on a monthly basis, amid lower energy prices. The Core CPI Index, which strips out food and energy prices, is expected to increase by 0.2% following modest gains a month earlier.

Last month, Fed vice chair Stanley Fischer indicated that there is good reason to believe that inflation will move higher as the temporary forces such restraining it continue to "dissipate further." Core PCE inflation, the Fed's preferred gauge of price increases, has remained under its long-term targeted goal of 2% for every month over the last three years. Fischer highlighted a stronger dollar and dwindling crude prices as transitory or one-off effects that could recede over the next year.

Fed chair Janet Yellen has also noted that it could take up to 18 months for a change in interest rates to fully impact the economy. The hawkish stance provides support for a modest interest rate hike if the Fed believes inflationary pressures could increase even after rates move higher.

Gold, which is not attached to interest rates or dividends, struggles to compete with high-yield bearing assets in rising rate environments.

Elsewhere, the Shanghai Composite Index fell by more than 3.5% in overnight trading, suffering its sharpest one-day loss in three weeks. After surging by approximately 150% in a 12-month period, Chinese equities have plunged by roughly 40% from its mid-June highs, amid slowing growth forecasts and liquidity concerns.

China is the world's largest producer of gold and the second-largest consumer of the precious metal behind India.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.