[Au Price]Gold Ends Near Steady On Position Squaring Ahead of FOMC Statement

By Paul Ploumis 29 Jul 2015 Last updated at 06:21:36 GMT

(Kitco News) - Gold prices ended the U.S. day session near unchanged levels but up from the daily lows seen earlier Tuesday. Trading was quieter and traders squared positions and headed for the sidelines ahead of Wednesday afternoon’s FOMC statement. A calmer market place Tuesday and a bearish chart posture did limit buying interest in safe-haven gold. December Comex gold was last down $0.80 at $1,096.10 an ounce. September Comex silver was last up $0.03 at $14.635 an ounce.

Traders are looking forward to the Federal Open Market Committee (FOMC) meeting that began Tuesday morning and ends with a statement Wednesday afternoon. As has been the case for the past several meetings, traders and investors will parse the statement, seeking clues on the precise timing of the Fed’s looming interest rate rise. There will be no press conference from Fed Chair Janet Yellen.

A report from the GFMS metals group Tuesday said world demand for gold in the second quarter of this year was the lowest since 2009. Physical gold demand was down 14% from last year. The report said gold demand from China was especially weak due to the bull market run in China stocks earlier this year pulling funds away from gold.

This week’s sharp sell-off in the Chinese stock market is still giving the market place some pause, but the anxiety seen Monday mostly dissipated Tuesday. The China stock market on Monday saw the biggest one-day drop in eight years, as the Shanghai composite index was down 8.5%. The index fell another 1.5% Tuesday, but did close well up from its daily low. The selling pressure in China equities is coming from concerns the Chinese government will not continue its recent efforts to support Chinese share prices. China has the world’s second-largest economy and is the world’s largest raw commodity importer. Some market watchers reckon the troubles in China’s stock market and its sputtering economy could cause the U.S. Federal Reserve to delay its plans to raise its interest rates.

Crude oil prices hit another four-month low Tuesday, partly on the China worries and amid a glut of oil on the world market. However, some short covering during the U.S. session lifted prices above unchanged. It’s becoming more likely that in the coming weeks crude will dip into the $30s per barrel, at least briefly. The other “outside market” on Tuesday afternoon saw the U.S. dollar index higher but down from the daily high. The greenback bulls have lost some power the past week as trading has turned choppy and the near-term price uptrend in the dollar index has stalled.

The London P.M. gold fix is $1,096.20 versus the previous A.M. fix of $1,095.60.

Courtesy: Kitco News