GOLD DOWN, PLATINUM UP

GOLD PRICES were subdued yesterday despite a pull back in the dollar, as traders looked ahead to a US Federal Reserve (Fed) policy meeting later in the week.

Spot gold was down 0.2 percent at $1 798.28 (about R26 681) an ounce by 4.13pm, while US gold futures also lost 0.2 percent to $1 798.10.

After closing back above the $1 800 level on July 7, gold has been caught in a narrow trading range of about $8.

“Gold is anchored near $1 800, so any correction below it sees it gravitate back towards $1 800 like a rubber band and any move towards $1 820, sees it snap right back,” said Phillip Streible, from Blue Line Futures in Chicago.

But Streible expects yields to drift lower, the dollar to drop and some weaker US economic readings to support gold prices going forward.

The precious metal, however, failed to take advantage of a weaker dollar yesterday. US benchmark treasury yields were also down slightly, having pared most of an early drop to a near one-week low.

Market participants are focused on a Fed meeting that begins today, following comments from it’s chairperson Jerome Powell that suggested that the central bank would remain accommodative.

“Should market participants discover that the FOMC (Federal Open Market Committee) has been hashing out more details about its tapering plans, that could force gold to relinquish the psychologically-important $1 800 level and test the June lows around $1 750-$1 770 for support,” Han Tan, market analyst at Exinity Group said.

“Any near-term relief for bullion is likely to be resisted around $1 830 where its 50-day simple moving average lies, barring a dovish surprise from the Fed this week.”

Silver rose 0.2 percent to $25.20 an once and palladium gained 0.7 percent to $2 692.24. Platinum advanced by 0.8 percent to $1 070.44.