Gold slides for third day running

Gold has slipped ahead of this afternoon’s Federal Reserve meeting.

Gold is trading at $1339, down 1.1%, as traders are expecting the Fed to reduce its bond-buying scheme this evening. At the moment the US central bank is operating a quantitative easing (QE) scheme of $65 billion per month, and the consensus is that it will be lowered to $55 billion.This could push the US dollar higher and, in turn, drive gold lower. Gold is up 11% year-to-date, so it is no surprise we have seen profit-taking ahead of the meeting.

Gold was around $1330 before the tensions arose in Ukraine, and it approached the $1390 level at the start of the week. The situation in Crimea is far from over, and if military intervention becomes more likely we could see gold rally.

Janet Yellen has not tapered the QE scheme yet during her tenure. If she decides to leave it unchanged, we could see gold head towards the $1350 mark.

Spot gold chart

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.