Gold Futures dropped from a six-week high on Friday on speculation higher prices could reduce physical demand and the Federal Reserve could reduce its monthly bond purchases further at the next meeting.
Gold for immediate delivery dropped 0.32% to $1,258.10 an ounce on the New York’s Comex at the time of writing, falling from recent highs of $1,267 an ounce seen on Thursday, the highest since December 10. While silver futures edged up 0.15% to $19.98 an ounce.
Gold- FOMC
With the anticipating FOMC meeting approaching, the previous metal has been under pressure as the meeting may reducing the monthly asset purchases by an additional $10-billion trim.
Members of the Federal Open Market Committee (FOMC) are expected to meet for the next policy meeting scheduled for January 28-29. In the last fed-meeting, the central bank decided to reduce its monthly bond purchases by $10 billion to $75 billion a month.
Market analysts are predicting members of the Federal Open Market Committee to reduce its monthly bond purchases by $10 billion at every meeting to end the stimulus program by December year.
Gold – China
Meanwhile in China, premiums on the Shanghai Gold Exchange slid $9 an ounce from Thursday’s $12, reports confirmed. Market analysts predict that China probably overtook India as the world’s biggest gold consumer last year.
China will be celebrating the Lunar New Year Holiday at the end of the month.
Indian Finance Minister Palaniappan Chidambaram said that gold imports will be curbed into the next financial year from April 1.
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