Gold below 12-week top on investor caution before Fed statement | Reuters - Firstpost
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Gold below 12-week top on investor caution before Fed statement | Reuters

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LONDON Gold steadied below a 12-week peak on Wednesday as investors remained cautious ahead of the Federal Reserve's first policy statement of the year, which is expected to give clues on interest rates.

While the U.S. central bank is likely to keep key rates unchanged at the conclusion of its two-day meet later in the day, investors are keen to see its latest outlook on global economic headwinds.

"A potential further decline in equities and market uncertainty about global growth is a good environment for gold because investors want something defensive," ETF Securities analyst Martin Arnold said.

Spot gold XAU= was down 0.1 percent at $1,118.80 an ounce by 1256 GMT, within sight of Tuesday's peak of $1,122.90, its strongest since Nov. 3.

U.S. gold for February delivery GCcv1 was also down 0.1 percent, at $1,119.10 per ounce.

With risk aversion intact as concerns over global growth persist, "I won't be surprised if gold hits $1,150, even $1,200 in the first quarter", said Barnabas Gan, analyst at OCBC Bank in Singapore.

After a 10 percent drop in 2015, its third year of losses, gold has so far benefited from turmoil in equity markets and worries about an economic slowdown in China, which contributed to lift prices by nearly 6 percent this month.

The dollar fell 0.5 percent versus a basket of currencies .DXY, while European equities succumbed to another slide in oil prices. [MKTS/GLOB]

Reflecting rising confidence in gold, holdings of SPDR Gold Trust (GLD), the world's largest gold-backed exchange-traded fund, stood at 21.52 million ounces on Tuesday, the highest since Nov. 5. [GOL/ETF]

China's net gold imports for December via main conduit Hong Kong surged to the highest in more than two years, data showed on Tuesday, as investors lost faith in collapsing stock markets and a weakening currency.

"China has taken advantage of low gold prices and an equity market rout to stock up on gold assets," said Helen Lau, analyst at Argonaut Securities.

Lau expects China's gold imports to remain strong due to a seasonal demand surge ahead of the Lunar New Year holiday in February.

Spot silver XAG= slipped 0.5 percent to $14.40 an ounce, platinum XPT= lost 0.1 percent to $870.74 and palladium XPD= was unchanged on the day at $492.75.

(Additional reporting by Manolo Serapio Jr. in Manila; Editing by Dale Hudson and Louise Heavens)

This story has not been edited by Firstpost staff and is generated by auto-feed.

First Published On : Jan 28, 2016 04:30 IST

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