Gold holds steady as investors look to US rate verdict tomorrow

Gold holds steady as investors look to US rate verdict tomorrow

	Published : Tue, 20 Mar 2007 13:04 By : Agencies Print this Story

LONDON (AFX) - Gold held steady, close to intra day highs set during the Asian session ahead of the US interest rate verdict tomorrow.

At 11.47 am, gold was at 655.43 usd per ounce, little changed from the 653.60 usd seen in late New York trade yesterday. Earlier the precious metal touched 656 usd per ounce, just below yesterday's seven-day high.

The precious metal is seen trading in a relatively narrow range today. Analysts remain bullish in the medium-to-long term but do not expect major gains ahead of the meeting of the FOMC tomorrow.

'The market remains in wait-and-see mode as traders look for the Fed's interest rate decision, which is due tomorrow,' said James Moore, an analyst at theBullionDesk.com.

'The 656-661 usd chart lines will again provide strong resistance, however, a break should see a swift move to higher levels as recent shorts are forced to cover.'

'I am bullish but we will have to wait until the back end of the week before we see any clear moves,' he added.

The FOMC's two-day meeting on interest rates starts today, with analysts looking for any hint from the central bank over where rates are headed in the coming months.

Although most expect the committee to leave rates unchanged when they announce their decision tomorrow, cuts are expected later this year, which would pressure the dollar downwards, a bullish move for gold.

Analysts are predicting prices could touch 700 usd this year provided there is additional impetus from either dollar weakness or increased interest from institutional investors.

Among other precious metals, platinum was at 1,225 usd, slightly off yesterday's high of 1,230 usd, palladium was at 348.50 usd, and silver stood at 13.22, up from a high of 13.20 usd in late New York trade yesterday.

jan.harvey@afxnews.com

har/har

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited