Gold Volatility Ahead Of The FOMC
$GLD
Gold prices remain weak ahead of the much anticipated Federal Open Market Committee (FOMC) decision Thursday, but one analyst says get ready for the Fed to pull the trigger and gold action to resume.
The US central bank may be ready to move on rate hikes and investors could see movement in Gold.
The recent Gold action muted with buyers and action coming in when Gold dipped below 1,100. Dec Gold futures were last quoted down 0.34% at 1,103.90 oz Tuesday.
Expect believe a tight range to continue for the metal heading into the meeting and then he anticipates volatility to really pick up.
I beleive that the range that we are in now is 1,120 on the Northside, that the Key level of resistance and it’s also the 50-Day MA.
Speaking from the Chicago Merc Tuesday, one analysts said he is leaning a little bit more in favor of the Fed raising rates Thursday. He added that despite the Fed missing its window of opportunity earlier this year, the central bank may have a chance to raise rates now that markets have stabilized.
Look for quieter markets activity leading up to the FOMC meeting’s conclusion Thursday afternoon and for more active markets in the immediate aftermath of the FOMC meeting’s results.
India, the world’s 2nd-biggest Gold buyer after China, imposed the import restrictions last year to avert a trade deficit crisis that pushed the Rupee to record lows.
“Restrictions placed on import of Gold… stand withdrawn with immediate effect,” India’s central bank said in a statement on Saturday, 29 November.
Support for Spot Gold comes from jewelry demand from India in the lead up to and during the wedding season, which starts again in late September. India did record a 176% increase in Gold imports in August to US$2-B from about US$756-M.
Overall, the impact of wedding season Spot Gold buying has faded in recent times as India is no longer the world’s largest Gold consumer, partly because of the on-going government import restrictions on precious metals. If they are further relaxed, perhaps India will regain its Top spot.
India’s Akshaya Tritiya festival considered by India’s more than 900-M Hindus as an auspicious day to buyGold and Silver, fell on 21 April this year. Bullion is bought in India during festivals and marriages as part of the bridal trousseau or gifted in the form of jewelry by relatives.
Stay tuned…
HeffX-LTN
Paul Ebeling
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