FX Traders Worrisome on Gold’s 5-Week Low as they await Fed meeting minutes
November 20, 2013 – Gold drops considerably to a 5 week low on Wednesday, as eager investors adopted cautious position awaiting for the release of a key U.S. economic data and meeting minutes from the Federal Reserve.
The Comex division of the New York Mercantile Exchange, gold futures delivery for December had traded at USD 1,262.41 a troy ounce during U.S. morning trade which was down 0.85%.
It fell to a session low of USD 1,259.60 the weakest since October 15.
In December, the contract settled at 0.99% higher at USD 1,273.51 on Tuesday.
Gold futures likely to find support at USD 1,251.10 a troy ounce, a serious low from October 15th and resistance at USD 1,287.70, the high from November 18th.
The U.S. may be releasing a series of economic data later in the day, in reference to the retail sales, consumer price inflation, existing home sales reports and business inventories. The market players are also looking at the Fed to release reports on the case of strengthening or weakening the Fed’s stimulus for scale back.
FX traders are also waiting for the release of the minutes of the Fed’s October meeting later in the day for the future of the U.S. monetary policy.
Ben Bernanke stated that the Fed will most likely maintain the interest rates near zero, until after the unemployment rate drops well below 6.5%, which is the threshold for increasing rates.
This year has been hard on gold, dropping 25%, on the concerns that the Fed will begin cutting back on its easy-money policy by cutting the monthly bond purchasing program.