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Gold lower as Fed meeting and low oil price weigh

Few gold investors are prepared to commit ahead of the Fed decision Wednesday

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Gold was trading around US$4 lower at US$1,070 on Monday.

Gold came under pressure on Monday as a low oil price and the upcoming Federal Reserve meeting kept the metal in check.

Few gold investors are prepared to commit ahead of the Fed decision Wednesday as the outcome is widely predicted to be a rate rise.

Short covering allowed the gold price to drift higher last week, but the mood remains jittery.

Lukman Otunuga, research analyst at FXTM, said: “Regardless of the recent gains, this precious metal remains bearish and the growing optimism that the Fed will be raising US interest rates next week should limit how high gold can advance.”

By Monday afternoon, the Fed Fund Futures, a tool used to determine the likelihood of a Fed rate rise, suggested there was a 79% chance of a rise.

Otunuga suggests there is still potential for gold bears to instigate another round of selling throughout the precious metals.

From a technical standpoint, prices are trading below the 20-day moving average, and a breakdown below US$1,063 may encourage sellers to send the metal towards US$1,046, he said.

Gold was trading around US$4 lower at US$1,070 on Monday.

Elsewhere, silver was down 1% to US$13.78 while platinum gained 1.3% or US$11 to US$851.

 

Major Movers

Randgold Resources down 80p to 4,048p.

Fresnillo down 11p to 664p

Anglo American down 11p to 281p.

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