Gold Declines Before Federal Reserve’s Decision as Dollar Rises
Gold dropped for the third time in four days before a Federal Reserve meeting as the dollar rose after a report that Japanese Prime Minister Shinzo Abe is preparing a stimulus package.
Bullion for immediate delivery traded 0.2 percent lower at $1,318.15 an ounce at 2:30 p.m. in Singapore, according to Bloomberg generic pricing. The precious metal remains 24 percent higher this year.
Gold’s rally in 2016 has been trimmed as investors turn their attention to the Fed meeting and speculate whether the Bank of Japan will ease policy. While traders are putting only 10 percent odds on a rate increase at the Fed gathering that ends Wednesday, the probability for a December hike has inched closer to 50 percent from just 15 percent a month ago.
The Bloomberg Dollar Spot Index rose 0.2 percent, gaining for the third time in four days. Bullion typically moves inversely to the U.S. currency. The yen dropped against the greenback after Kyodo News reported Abe announced plans for more than 28 trillion yen ($265 billion) in stimulus in an effort to prop up the nation’s ailing economy.
- Holdings in gold-backed exchange-traded funds fell 4.4 metric tons to 1,996.2 tons on Tuesday, data compiled by Bloomberg show. That’s the lowest level since July 1.
- In China, bullion of 99.99 percent purity was 0.3 percent lower at 283.15 yuan a gram ($1,320.20 an ounce) on the Shanghai Gold Exchange.
- On the Shanghai Futures Exchange, gold for December delivery dropped 0.2 percent to 284.65 yuan a gram, while silver declined 0.3 percent to 4,318 yuan a kilogram.
- Spot silver lost 0.4 percent in London, platinum fell 0.2 percent and palladium retreated 0.2 percent.