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Gold Prices Rally As Markets Wait for the Release of Fed Minutes

Gold bars on dollars

The U.S. Federal Reserve is occupying what is left of the trading news page, whether in print, online or on broadcast. They are practically at the center stage of any economic news lately.
As investors embark for their summer holidays, with trading volumes down and the global economic calendar sporting a lighter schedule, traders await for the main event these days involving, yes, the Federal Reserve.

The Federal Open Market Committee (FOMC) is scheduled to release the minutes of its much-awaited meeting on the Fed’s economic stimulus program. Market analysts speculate that the tapering of the $85 billion per month bond-buying program is in the offing. The earliest month that the Quantitative Easing (QE) program will be tapered is this September, which is next month already, or can be held off for December. It is speculated that the Fed will cut back their asset purchases by 10 billion US dollars. Until the minutes of the meeting is released, the trading market is on its toes again, as it waits for what could be the driving force that will move current sentiments in the market.

Gold and the US Dollar

Regardless of the minutes, the market is trading in all directions now. Volatile tendencies are unleashed as uncertainty permeates the atmosphere of the trading world. Investors are positioning themselves on a cautious stance ahead of the release.

A stronger dollar paved initial loses for the yellow metal, with gold prices swinging between gains and losses. Demand for gold coins eased in recent weeks, and gold retailers slowed down even if gold prices are recovering. Russia’s gold reserves for the month of Junehave just increased from 32 million troy ounces to 32.2 million troy ounces in July. The FOMC meeting minutes can shed hints on the plans of the Fed, which would also heavily impact gold prices in the international scene.

Gold and Silver Trading

In the Asian session, gold is trading at 1367.70, down by at least $4.90. On the Commodity Exchange, Inc. (COMEX), gold recovered and ended slightly higher encouraged by the seasonal demand from Asia, and as traders wait for the release of the policy meeting minutes.
In the largest ETF backed by the precious metal, SPDR gold trust, gold holdings increased to 914.12 tons as of August 20. With the largest ETF backed by silver, ishares silver trust, silver holdings increased to 10,555 tons as of August 20. Silver is trading low at 22.99, losing some of its gains after it traded above the $23 price level earlier this week.

Other Precious Metals

Copper Futures is steadily trading this morning at 3.323, with traders being careful about opening large positions ahead of the recent policy meeting, as well as the release of the Chinese manufacturing data.
According to the Nickel Study Group, the global Nickel market has a surplus of 74,200 tons in the first six months of the year. Similarly, traders are guarded when it comes to adapting a bullish behavior. It is expected that base metals are likely to go down as long as traders do not know yet the contents of the FOMC meeting, and until the Chinese and Euro Zone manufacturing numbers are released.