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Gold Trades Near Week Low On Fed Stimulus Outlook

ByICN.com
Published 01/22/2014, 04:42 AM
Updated 07/09/2023, 06:31 AM
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Precious-Gold traded near its lowest level this week on Wednesday amid speculations the Fed would resume its stimulus taper, thereby damping demand on the metal as safe haven asset.

A report released by the Wall Street Journal mentioned the Fed would cut another $10 billion for the second time in six weeks during their upcoming meeting on Jan. 28-29.

The most recent data has suggested the world’s biggest economy is moving on the right track towards recovery, and therefore the Fed may resumed its stimulus taper smoothly.

The Fed decided on Dec. 18 to cut $10 billion of its monthly bond purchases to $75 billion starting from January until nothing by the end of 2014.

On the other hand, the improvement in the global economy is prompting investors to put their money in the equity market.

Bullion will drop to $1,050 in the next 12 months as the Fed cuts bond purchases, Goldman Sachs analysts said in a Jan. 12 report.

Meanwhile, the yellow metal is trading around $1240.65 an ounce after hitting a high of $1243.48 and a low of $1239.17.

After hitting its second lowest record in 2013 of $1182.35 on Dec. 31, the shiny metal has found some support from Chinese demand to rebound from six-month low, yet the mild recovery halted after hitting resistance near $1260 this week.

The U.S. dollar rose versus a basket of major currencies to hover around 81.23 after hitting a low of 81.12.

Crude oil for March’s delivery climbed to set a new high of $95.57 a barrel, compared to the session’s opening at $95.20.

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