Gold is currently trading at $1261, up 0.4% after losing ground over the past two days. All eyes will be on the Federal Reserve tonight, as economists are expecting a further reduction in the stimulus package; December’s taper reduction pushed the price of gold below the $1200 mark. Tonight, consensus expects a reduction by $10 billion – more than this could ensure gold heads lower.
The Turkish central bank hiked interest rates overnight in an effort to stop the Turkish lira from collapsing, which has brought stability and confidence to the financial markets. Gold rallied at the end of last week as there was major worry over the Argentine peso and the Turkish lira, and if these concerns resurface we could retest the $1300 level as Alastair McCaig stated.