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Gold steadies ahead of central bank meetings


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Mar 25, 2010
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Gold steadies ahead of central bank meetings
By Rachel Koning Beals
Published: Apr 25, 2016 8:00 a.m. ET

Federal Reserve, Bank of Japan expected to call tune for metals

AFP/Getty Images

Gold edged higher early Monday as sellers paused the heavy selling that drove futures sharply lower at the end of last week, with traders looking ahead to interest-rate policy meetings that could set the near-term course for dollar/yen trading and precious metals.

Gold for June delivery GCM6, +0.51% gained a modest $4.90, or 0.4%, to $1,235 an ounce. The SPDR Gold Trust GLD, -1.28% slipped less than 0.1%.

Silver for May delivery SIK6, +0.33% was little changed near $16.86 an ounce. Gold ended last week modestly lower after a tumble on Friday. Silver, which has been outrunning gold as it finds underlying industrial-use demand, advanced 3.6% last week. That was its third straight weekly gain.

Gold stabilized as the dollar tipped lower. The greenback continues to affect dollar-denominated gold prices; a weaker dollar makes gold more attractively priced to foreign buyers and vice versa. Early Monday, the ICE U.S. Dollar Index DXY, -0.30% which measures the buck against a basket of currencies, slipped 0.2%.

The dollar fell 0.6% to 111.13 Japanese yen USDJPY, -0.81% Monday after hitting a three-week high against this rival on Friday. That move, in fact, followed recent record-high bullish yen positioning among speculative investors, according to some measures. Read more on currency trading.

Central banks could drive currency and metals trading this week. The Bank of Japan is scheduled to issue its policy decision Thursday, a day after the Tuesday-Wednesday gathering of the Federal Reserve wraps up.

“It is widely expected that [the Fed] will sit back and do nothing…,” said Naeem Aslam, chief market analyst with AvaTrade. That leaves the Bank of Japan’s decision-making the bigger possible market mover over the Fed, he said.

Dollar/yen remains underpinned “mainly based on the expectations that the [Bank of Japan] will take aggressive measures to weaken the currency,” said Aslam.

But longer term, the expected expansion of monetary accommodation in Japan is unlikely to further support already strong gold unless policy makers essentially “shock” markets with an expansion of negative interest-rate policy, analysts have said.

And those analysts mostly stress that the eventual path for U.S. interest rates continues to point higher, which could support the U.S. dollar and limit the upside for gold.

Rounding out metals trading action, May copper HGK6, -0.18% slipped less than 1 cent, or 0.2%, to $2.26 a pound after gaining more than 5% last week. July platinum PLN6, -0.59% fell $5.60, or 0.6%, to $1,005.60 an ounce, while June palladium PAM6, -0.96% shed $5.70, or 0.9%, to $600.50 an ounce.



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Nov 25, 2013
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And those analysts mostly stress that the eventual path for U.S. interest rates continues to point higher, which could support the U.S. dollar and limit the upside for gold.

Oh really? When does this "eventual path" begin to take shape? Rates have been on a sustained downward slope for the past 35 years. I'm not holding my breath.

The rest of the world's counterfeiters devalue their currencies, which drives the appearance of USD "strength" and gives the US counterfeiters cover to devalue their own currency. This is all just a shell game.


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Apr 1, 2010
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...This is all just a shell game.

For the innermost big players it is a shell game- they work together often in an effort to protect each other. But in general, when you include all the players, it's more like the games of musical chairs and high stakes, no-limit poker rolled into one.