Gold News

Gold Price "Muted" Before US Fed as Greek Equities Sink with Bonds, Singapore Joins Monetary Easing, GLD Gold ETF Sees Heaviest Inflows Since Mid-2010

GOLD PRICES moved in a $10 range ahead of the US Federal Reserve's new policy statement Wednesday, slipping as Wall Street stock markets opened higher following news of the largest quarterly corporate profits in history from Apple (Nasdaq:AAPL).
 
Dollar gold prices had earlier touched $1293 per ounce, just shy of last week's closing level, as commodities and government bonds ticked lower.
 
Gold priced in Euros moved in a tighter 0.8% range, heading sideways for the third session running around €1135 per ounce, as the single currency slipped in advance of the Fed announcement.
 
Athens stock market today dropped over 9%, and Greek 10-year bond yields rose near 10% per year, as the new Syriza-led coalition government held its first cabinet meeting.
 
"Our priority is a new renegotiation with our partners," said Greece's new prime minister, Alexis Tsipras, at today's meeting. "We will not default."
 
Yesterday saw another heavy inflow into the largest exchange-traded gold fund, the SPDR Gold Trust (NYSEArca:GLD), adding almost 10 tonnes to the gold needed to back its shares as the broader stockmarket fell.
 
That took the GLD's total holdings above 752 tonnes – up by 6.7% since early January's new 6-year low for the fastest 3-week gain since June 2010.
 
US crude oil meantime lost 2% and natural gas prices fell 3% Wednesday as Winter Storm Juno moved off the north-eastern United States having failed to hit as hard as forecast.
 
"Wednesday should bring us a choppy session," reckoned a note overnight from US brokers INTL FCStone, forecasting that the Fed policy statement will "likely pay greater attention to the slowing global macro picture...reinforce its 'go-slow' approach on interest rates...[and] weaken the Dollar, providing gold with support."
 
"Since the Fed last met on Dec 14th," notes the London trading desk of Standard Bank, "we've seen monetary easing from ECB, Bank of Canada, Swiss National Bank, Danish Nationalbank, Turkey and India.
 
"Something's clearly going on as the timing of these actions is unexpected."
 
Wednesday saw the Monetary Authority of Singapore surprise the market by saying it will "reduce the slope" of appreciation in its Dollar against other currencies in 2015, citing falling inflation and the need for "medium-term price stability".
 
The Singapore Dollar fell 1% against the USD, hitting its lowest level since July 2010.
 
Gold price action in Asian trade "was muted," says refiner MKS's dealing desk, "with participants happy to sit on the sidelines" ahead of the US Fed announcement, due at 14:00 ET.

Adrian Ash is director of research at BullionVault, the physical gold and silver market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and is now a regular contributor to many leading analysis sites including Forbes and a regular guest on BBC national and international radio and television news. Adrian's views on the gold market have been sought by the Financial Times and Economist magazine in London; CNBC, Bloomberg and TheStreet.com in New York; Germany's Der Stern; Italy's Il Sole 24 Ore, and many other respected finance publications.

See the full archive of Adrian Ash articles on GoldNews.

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