PRECIOUS-Gold off 2-1/2 week low but Fed meeting weighs

Tue Jan 29, 2013 1:26pm IST

* Federal Reserve policy meeting on Jan 29-30
    * Spot gold may rebound to $1,669/oz - technicals
    * Coming up: U.S. consumer confidence, Jan; 1500 GMT

 (Adds comments; writes through; updates prices)
    By Rujun Shen
    SINGAPORE, Jan 29 (Reuters) - Gold rebounded on Tuesday,
snapping a four-day losing streak as bargain hunters picked up
deals after prices fell to their lowest in more than two weeks
in the previous session, but caution ahead of a Federal Reserve
meeting limited gains.
    Investors are waiting to see if the Fed will make any
pronouncements about its monetary policy following their two-day
meeting that will kick off later in the day, after recent data
showed signs of a stabilising recovery in the world's biggest
economy. 
    Most economists do not expect the Fed to curtail its
bond-buying programme any time soon, but any hint that the
central bank is considering it would further depress gold.
  
    "We are seeing a technical rebound following a few days of
price decline," said a Shanghai-based trader, adding that recent
upbeat U.S. data spooked investors and led to a sell-off in gold
on speculation that the Fed will cut short its quantitative
easing.
    "In the short run, gold is still going to drift without much
conviction, though over the longer term it is still facing very
heavy pressure on the upside."
    Physical buyers in Asia returned to the market when prices
fell to $1,650 level, giving some support to prices, the trader
added.
    Loose monetary policy helped gold stage a twelfth year of
higher prices in 2012, as investors worried about currency
debasement as a result of rampant cash printing by central
banks.
    Spot gold rose half a percent to $1,662.85 an ounce
by 0739 GMT, recovering from Monday's intra-day low of
$1,651.93, its lowest since Jan. 9.
    U.S. gold was up 0.6 percent to $1,662.30.
    Technical analysis suggested that spot gold could rebound to
$1,669 an ounce during the day, as it did not break a strong
support at $1,652, said Reuters market analyst Wang Tao.
 
    
    Equities and other riskier assets have attracted investors
over the past week or so, while gold lost some of its shine, as
upbeat data from the world's key economies signalled that the
economic recovery is gaining traction. 
    Some analysts, though, said the optimism might have gone
ahead of itself.
    "The situation in the U.S. has not changed too much and we
need some time to really have confidence in the U.S. economy,"
said Yuichi Ikemizu, head of commodity trading, Japan, at
Standard Bank, adding that Friday's U.S. employment data could
shed light on the health of the economy.
    The Fed has vowed to keep its rock-bottom interest rates
until unemployment rate falls to at least 6.5 percent. In
December, the unemployment rate held steady at 7.8 percent.
 
    Anglo American Platinum, South Africa and labour
unions have agreed to postpone a restructuring exercise that
could lead to 14,000 job cuts to allow for more talks. The news
sent spot platinum down 1.9 percent on Monday, its
sharpest daily decline in more than a month. 
    The metal rebounded 0.9 percent to $1,673.50 on Tuesday.
    
      Precious metals prices 0739 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1662.85    8.51   +0.51     -0.70
  Spot Silver        31.04    0.22   +0.71      2.51
  Spot Platinum    1673.50   14.51   +0.87      9.02
  Spot Palladium    741.83    6.11   +0.83      7.20
  COMEX GOLD FEB3  1662.30    9.40   +0.57     -0.81        18233
  COMEX SILVER MAR3  31.08    0.30   +0.97      2.81         4838
  Euro/Dollar       1.3438
  Dollar/Yen         90.71
  COMEX gold and silver contracts show the most active months
 
 (Editing by Miral Fahmy)
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