• Gold edged lower early Wednesday as the dollar firmed with investors awaiting hints on a U.S rate hike following the Federal Reserve's two-day policy meeting.
• Investors are also awaiting the naming of the next Fed chair likely on Thursday, the Bank of England policy meeting on Thursday and more data, including U.S. payrolls figures on Friday.
• Asian shares looked set to extend their gains into a fourth straight day on Wednesday on the back of solid economic growth, while oil prices were on a bull run on hopes of an extension of output cuts by major oil producers.
Catalonia's ousted leader Carles Puigdemont agreed on Tuesday to a snap election called by Spain's central government when it took control of the region to stop it breaking away, but he said the fight for independence would go on.
• A few snippets from ANZ - "Gold prices suffered under the weight of the stronger U.S. dollar. Investors' appetites has been relatively weak as the currency has rebounded amid reports that President Donald Trump was close to announcing tax cuts.
However, investors also remain cautious ahead of Trump's announcement of a new chair for the Fed, as well as their monthly interest rate meeting."
• National Australia Bank - (on the FOMC) "A rate hike in December is largely priced into markets. However, investors are looking for the Fed stance on monetary policy: in particular, the inflation outlook and how the Federal Reserve wishes to respond.
In other words, whether they are likely to adopt a 'wait and see' mode, or get ahead of the curve. The latter will, of course, be negative for gold".
• Gold prices declined as the US Dollar rose against most of its major counterparts and front-end Treasury bond yields gained ground, tarnishing the appeal of non-interest-bearing and anti-fiat assets. The move came against a backdrop of firming Fed rate hike bets and may have reflected pre-positioning ahead of the upcoming FOMC policy announcement, which is widely expected to set the stage for tightening in December.
Priced-in policy bets implied in Fed Funds futures put the probability of a rate hike at the year’s last meeting of the policy-setting committee at a hefty 97 percent. An outcome that investors deem “hawkish” in this context seems like a more difficult proposition than a “dovish” one. With that in mind, the yellow metal might manage something of a recovery in its aftermath.
• GOLD TECHNICAL ANALYSIS – Gold prices are still trying to negotiate support in the 1266.44-69.10 area (October 5 low, 38.2% Fibonacci expansion). A daily close below it exposes the 50% levelat 1257.69. Alternatively, a move above support-turned-resistance at 1277.16 opens the door for a retest of 1291.06, the October 20 high.
Reference: Reuters
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