Gold continues to have a listless week. On Wednesday, the spot price per ounce stands at $1227.84. In the US, today’s highlight is the FOMC policy meeting, with the Fed expected to wind up its QE program.
The Federal Reserve will be in the spotlight on Wednesday as the US central bank releases its monthly statement. It is widely expected that the Fed will wind up its stimulus scheme, which has been in place since September 2012. Such a symbolic step would mark a vote of confidence in the economy from the powerful Fed. The markets will also be looking for hints regarding the timing of a rate hike, which is expected sometime in 2015. The Fed has noted its concern about the lack of growth in Europe, and a slowdown in China could put the rate hike on hold. Traders should treat the FOMC policy statement as a market-mover which could have a significant impact on the direction of gold prices.
US durable goods looked dismal in September. Core Durable Goods Orders dropped 0.2%, its second decline in three months. This was well short of the estimate of 0.5%. Durable Goods Orders followed suit with a decline of -1.3%. This was a second straight decline, and missed the estimate of 0.4%. There was much better news from CB Consumer Confidence, as the indicator climbed to 94.5 points, up sharply from 86.0 points. The easily beat the estimate of 87.4 and marked a 7-year high. An increase in consumer confidence usually translates into stronger consumer spending, which is a critical component for economic growth.
XAU/USD 1227.82 H: 1230.59 L: 1227.02
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