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Taper talk: Gold under pressure ahead of FOMC
Gold is trading near a 6 week low ahead of the Federal Reserve’s decision on tapering. Analysts are expecting a USD10bn cut of its USD85bn a month bond buying programme. Because tapering is widely expected, most of the moves are already priced in. But of course if we get a more dovish or more hawkish decision then all bets are off.
The precious metal has been under pressure recently, with futures in the red for nine of the previous 10 sessions – now down 22 percent so far this year.
Saxo Bank’s Ole Hansen says it will find its next support level at around USD 1,270 an ounce.
Gold, often seen as a hedge against inflation and a slowing economy, benefited when central banks around the world launched stimulus measures to support their economies. The metal hit an all-time high of about USD1,920 an ounce in 2011.
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