Gold Drops Eyeing FOMC Language

Gold futures fell as investors assessed the outlook for U.S. interest rates before the Federal Reserve completes a two-day meeting.

The Fed will stay focused on raising rates about mid-year, according to a narrow majority of economists surveyed by Bloomberg. Higher rates curb gold’s appeal because it offers returns only through price gains.

“Traders could be taking positions before the Fed’s rate decision,” Phil Streible, a senior market strategist at RJO Futures in Chicago, said in a telephone interview. “You’re seeing gold pull back before that news.”

Gold futures for April delivery slid 0.4 percent to $1,287.40 an ounce at 9:33 a.m. on the Comex in New York, heading for the third decline in four sessions. Trading was 88 percent higher than the 100-day average for this time, according to data compiled by Bloomberg.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza