Reuters | Sep 18, 2019 08:51
* U.S. interest rate decision at 1800 GMT
* Focus also on Bank of Japan on Thursday
* Oil prices ease after surge on Saudi attack
By Brijesh Patel
Sept 18 (Reuters) - Gold consolidated around $1,500 on Wednesday, keeping to a $3 range ahead of a U.S. Federal Reserve decision on monetary policy while fears of oil-led inflation ebbed, limiting safe-haven inflows into bullion.
"Hopes that Saudi Arabia's production is going to come back online and oil prices will start to depreciate have boosted market sentiment, so we continue to see some calm across the markets ahead of the Fed meeting," said FXTM analyst Lukman Otunuga.
Oil prices retraced, having surged nearly 15% earlier in the week, after Saudi Arabia's energy minister said the country would restore its lost production by month-end, having restored customer supplies to levels they were prior to attacks on its key facilities. O/R
Gold is considered a hedge against oil-led inflation.
"There is something about that $1,500 level and gold is waiting for a catalyst, which will come in the form of the Fed," Otunuga said.
The Fed will conclude its latest policy meeting on Wednesday, buffeted by conflicting economic data and under steady White House pressure to cut interest rates sharply. are largely pricing in a quarter-point cut, with the focus now on how much more easing the central bank signals for this year and next.
Attention will also be on the Bank of Japan's policy meeting on Thursday, with the central bank expected to ease its policy this year. interest rates decrease the opportunity cost of holding non-yielding bullion and weigh on the dollar, making gold cheaper for investors holding other currencies.
The dollar .DXY , meanwhile, rose against a basket of major currencies.
"The latest price rise (in gold) was very quick and was driven to a large extent by speculation," Commerzbank (DE:CBKG) analysts said in a note.
"It is therefore likely to take some time for the gold price to settle down in any lasting manner above the psychologically important $1,500 mark. However, we believe that price-supportive factors should gain the upper hand in the longer term."
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.