Gold and silver prices ended the U.S. day session near unchanged levels in subdued trading Tuesday, ahead of two major central bank meetings that are arguably the most important markets events this month. December Comex gold was last up $0.40 an ounce at $1,318.20. December Comex silver was last down $0.005 at $19.285 an ounce.
Traders and investors await the results of the two-day meeting of the Federal Reserve’s Open Market Committee (FOMC). The meeting began today ends Wednesday afternoon with a statement. Most market watchers don’t think the Fed will raise interest rates at this meeting. The more likely date of any U.S. rate hike would be in December, according to the marketplace. However, bond king Bill Gross on Tuesday reportedly said there is a 50-50 chance the Fed will raise interest rates by 0.25% on Wednesday.
The Bank of Japan also met to discuss its monetary policy Tuesday. There is no clear consensus on the BOJ meeting’s outcome: whether more monetary stimulus will be initiated, and if so what—or whether the BOJ will stand pat. This uncertainty means the markets could be more impacted by the BOJ results that the FOMC results. The BOJ meeting’s results are due out sometime Wednesday morning, New York time.
Commerzbank looks for gold to hold up or even rise after widely anticipated meetings of the Bank of Japan and U.S. Federal Open Market committee Wednesday. Analysts say “gold should be well supported so we do not expect to see any slide in the gold price. Above all, the Bank of Japan’s meeting, which will be held overnight, is likely to be of considerable interest. This is because expectations of the BOJ are high after the central bank’s governor, (Haruhiko) Kuroda, announced a ‘comprehensive assessment’ of monetary policy. The U.S. Federal Reserve is likely to leave everything as it is tomorrow evening, on the other hand, and is not expected to raise interest rates any further until December.”
Gold traders are taking a snooze a day before Federal Reserve and the Bank of Japan announce their monetary policy decisions.
The precious metal’s 60-day historical volatility has fallen to the lowest in 13 months. Aggregate trading on the Comex in New York slumped 45 percent below the 100-day moving average for this time of day, data compiled by Bloomberg show. Open interest, a tally of outstanding contracts, is down 14 percent from a record in July. Gold and copper prices swung between small gains and losses.
Reference: KITCO, Bloomberg
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