Federal Reserves 1st Policy Statement of The Year

Federal Reserves 1st Policy Statement of The YearGold Silver Reports ~ 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 globalgrowth is a good environment for gold because investors want something defensive,” ETF Securities analyst Martin Arnold said.

*Spot gold was down 0.1 percent at $1,118.73 an ounce by 1035 GMT, within sight of Tuesday’s peak of $1,122.90, its strongest since Nov. 3.

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

With risk aversion intact as concerns over globalgrowth 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 0.4 percent versus a basket of currencies, while European equities succumbed to another slide in oil prices.

Reflecting rising confidence in gold, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, stood at 21.52 million ounces on Tuesday, the highest since Nov. 5.

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 slipped 0.8 percent to $14.38 an ounce, platinum lost 0.9 percent to $866.50 and palladium was unchanged on the day at $492. – Neal Bhai Reports

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Neal Bhai has been involved in the Bullion and Metals markets since 1998 – he has experience in many areas of the market from researching to trading and has worked in Delhi, India. Mobile No. - 9899900589 and 9582247600

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