Gold Drops From Two Week High Before FOMC Minutes

Gold traded little changed below a two-week high as the dollar strengthened before the Federal Reserve releases minutes of its latest policy meeting.

The Bloomberg Dollar Spot Index approached a five-year high before the Fed releases minutes of its Oct. 28-29 meeting, when it ended monthly asset purchases. Gold reached a four-year low earlier this month as expectations of higher interest rates next year helped the dollar rally.

Lower prices have spurred purchases. Trading of the Shanghai Gold Exchange’s benchmark bullion spot contract jumped this week and India’s imports rose in October. Indian buying may increase ahead of anticipated import restrictions, UBS AG said in a note today. Russia’s central bank bought about 150 metric tons of the metal this year, Governor Elvira Nabiullina said yesterday. Purchases were about 77 tons in 2013, International Monetary Fund data show.

“The big moment today is the Fed release,” David Govett, head of precious metals at broker Marex Spectron Group in London, said today in a note. “The market will no doubt be nervous ahead of it. The lower prices did attract buying and should in the future limit the downside somewhat.”

via Bloomberg

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