Gold Futures Retreat From a Two-week Peak

0
132

Gold Futures Retreat From a Two-week Peak

Gold dropped from a two-week high as investors awaited the release of Federal Reserve minutes that could provide hints on the possible direction monetary policy will take.

The Fed cut its stimuli injection by $10 billion to $55 billion at a meeting in March and its chair Janet Yellen said afterwards that the monetary regulator would end its bond-buying this year and hike interest rates in 2015. The precious metal lost 28% in 2013 as prospects for less bond-buying diminished its appeal as another way around inflation.

“The market is expecting reaffirmation from the Fed that the U.S. economy is showing strength, and that diminishes gold’s safe-haven premium. Today’s minutes will also indicate the Fed’s outlook on interest rates,” Newedge Group’s Tommy Capalbo told Bloomberg by phone.

June delivery gold futures dropped 0.3% to $1,305.50 per ounce as of 11:31 am in New York. On Tuesday, prices hit $1,314.70, a price not witnessed since March 26, as the dollar lost and tension in Ukraine resurged.

**relatedarticle**

Poorly performing stock markets and geopolitical factors in Ukraine have bolstered the price of gold, letting the commodity trade back at more than $1,300 for every troy ounce. However, Eugen Weinberg of commerzbank’s said that the recent price hikes of gold benefited a great extent from speculative market participants, with physical demand in China not being so good of late.

Market analyst Andrey Kryuchenkov at London-based VTP Capital wrote on Wednesday that he did not expect gold prices to keep going up unless the dollar declined further or Ukraine tensions took a turn for the worse. He added that investors would focus more on the Federal Reserve minutes.

According to Marketwatch gold encounters resistance that fluctuates between $1,310 and $1,315, while the $1,278 is a healthy level.

In the meantime, platinum contracts for June lost 0.1% to trade at $1,440.90 an ounce on the Mercantile Exchange of New York.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com