Metals - Gold edges higher but stays in holding pattern ahead of FOMC decision |
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Wed, 21 Mar 2007 12:05
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LONDON (AFX) - Gold edged up on follow-through buying after hitting a two-week high in intra-day trades yesterday on upbeat sentiment from fund buyers.But analysts said gains have been capped by uncertainty ahead of the Federal Reserve's interest rate decision later today.At 10.12 am, gold edged up to 660.35 usd per ounce against 658.25 usd in late New York trades yesterday, when it hit a two-week high of 660.85 usd intra-day.The metal remains in a holding pattern ahead of this afternoon's announcement from the Fed, analysts said.Although the market is expecting no immediate change to rates, it will be scanning the committee's accompanying comments for hints as to the future direction of rates.Some are now envisaging a rate cut sooner rather than later, which would be positive for gold.'It is well to note that just a month or so ago the Fed funds futures signalled a near zero chance of a rate cut for as late as August this year,' said HSBC analyst James Steel.'Fed fund futures now imply the chances are good the Fed will cut by or before the summer.'The rate decision aside, analysts remain broadly positive on gold's prospects as the metal recovers from last month's sell-off.'Gold appears intent on rebuilding the damage it (twice) took from declining stock markets over recent weeks,' said Kitco analyst Jon Nadler.'If there is enough momentum to the upside, as well as good buying on any interim lows, the conditions could be ripe for another try at the previous area of failure -- near 672 usd.'Aggressive fund buying activity in New York yesterday pushed the metal out of its recent narrow trading band to a two-week high, before it hit resistance at the 661 usd level.'While 661 usd is likely to contain gains in the interim, the medium- and longer-term outlook for the yellow metal remains strong and a push to the next resistance level of 672 usd is very likely sooner rather than later,' said analysts at Standard Bank.Among other metals, platinum was at 1,230 usd per ounce, up from 1,227 usd in late New York trade, palladium was at 348 usd, and silver was at 13.31 usd, matching yesterday's high.jan.harvey@afxnews.commaCOPYRIGHTCopyright AFX News Limited 2007. All rights reserved.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
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Gold finds support from rising oil prices, reserve diversification 