Metals: Gold Prices Rise as Investors Await Fed
September 20 2017 - 11:44AM
Dow Jones News
By Ira Iosebashvili
Gold prices edged higher Wednesday, as investors awaited the
conclusion of the Federal Reserve's monetary-policy meeting later
in the day.
Gold for December delivery was recently up 0.4%, at $1,316.30 a
troy ounce, on the Comex division of the New York Mercantile
Exchange.
While the Fed is expected to leave interest rates unchanged,
many investors will focus on details of how the central bank plans
to unwind its $4.5 trillion balance sheet in the months ahead, as
well as its views on inflation.
A string of weak inflation readings earlier this year dampened
expectations that the Fed would raise rates for a third time this
year in December, but some investors and analysts said last week's
stronger-than-expected consumer-price data could make the central
bank move more aggressively in normalizing monetary policy.
Expectations of a more hawkish Fed would weigh on gold, which
struggles to compete with yield-bearing investments when rates
rise.
At the same time, a weaker dollar and simmering geopolitical
tensions could help keep gold prices elevated in the months ahead,
analysts at Citigroup said in a note to clients. Their most likely
scenario envisions gold prices reaching $1,375 a troy ounce in the
next three months, before drifting lower in the next year. A
serious boost in geopolitical or economic tensions, such as a war
between the U.S. and North Korea or a U.S. market correction, would
take prices to around $1,475 a troy ounce, the report said.
In base metals, copper for December delivery was recently down
0.2%, to $2.9645 a pound.
Write to Ira Iosebashvili at ira.iosebashvili@wsj.com
(END) Dow Jones Newswires
September 20, 2017 11:29 ET (15:29 GMT)
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