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Gold drops as investors await Fed meeting for clues on policy

Spot gold fell 0.8% to $1 862.38 an ounce at 12:13 p.m. in Singapore, after dropping 1.1% on Friday.
Image: Bloomberg

Gold extended a decline as investors await this week’s Federal Reserve meeting for clues on the future path of monetary policy.

Fed officials could project interest-rate liftoff in 2023 amid faster economic growth and inflation, but they won’t signal scaling back bond purchases until August or September, according to economists surveyed by Bloomberg. More than half predict the quarterly rate-forecast “dot plot,” released after the conclusion of the central bank’s two-day gathering on Wednesday, will show the median of 18 officials penciling in at least one 2023 increase.

The remainder see no liftoff from near-zero rates until 2024 at the earliest, mirroring the Fed’s forecast in March.

Bullion retreated as the dollar and Treasury yields ticked higher, with traders further digesting Thursday’s report on the US consumer price index which showed that increases were largely driven by categories associated with economic re-openings, bolstering the view that inflation pressures may ease later in the year. Some investors are anticipating the Fed will reaffirm that its ultra-loose policy remains appropriate, and that it’s too soon to start even contemplating tapering bond purchases.

“It’s easy to be tactically neutral on gold here,” said Chris Weston, head of research at Pepperstone Group, who said he would look to turn bullish again on a close through $1,911. “When I look at the play book for this week’s Fed meeting, the skew of risk is to slightly higher real rates and a modestly stronger US dollar. This should result in a weak gold price, although the Fed do have a tendency to keep financial conditions in check unless something needs to be done.”

Spot gold fell 0.8% to $1 862.38 an ounce at 12:13 p.m. in Singapore, after dropping 1.1% on Friday. Silver, platinum and palladium all declined. The Bloomberg Dollar Spot Index ticked higher after rising 0.5% on Friday.

© 2021 Bloomberg

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Yeah, they will print 30% more US Dollars to cover the 30% more US Dollars printed since January 2020.

They can twist and roll but it ain’t going away.

Paper vs Gold

Gold is in the 1st mini correction within a resumed long term bull trend. The Rand is turning back into its long term weakening trend, this time carried by its own truly abysmal internals and an outlook of gangsterism rule, land grabs and no political hope.

With very high inflation coming up where do people invest?
GOLD

If in Africa invest in Gold (resources) and if in Europe invest in property.

Yeah, the FED will use the magic wand to fix everything.

The most indebted country in the world dictates to the rest of the world!

Strange?

End of comments.

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