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Singapore - Gold held a drop ahead of central bank policy meetings in the US and Japan this week, with investors set to parse any signals from the Federal Reserve for the course of policy over the remainder of the year.
Bullion for immediate delivery was at $1 233.84 an ounce in Singapore from $1 233.03 on Friday, when the metal fell 1.2%, according to Bloomberg generic pricing. That pared this year’s gain to 16%.
Gold has rallied in 2016 on surging demand for haven assets as concerns over the global economy give pause to the Fed’s policy-tightening path while the Bank of Japan (BoJ) has taken steps to boost growth. Although the Fed isn’t expected to raise rates on Wednesday, investors are waiting for any guidance on the future trajectory of increases.
The BOJ will expand stimulus at its meeting on Thursday, according to a slim majority of economists surveyed by Bloomberg.
“Investors are being cautious at the moment as gold has done very well since the beginning of this year, and as the Fed meeting is coming up many decided to take profit and stay on the side lines, hence prices fizzled out slightly,” Brian Lan, managing director of Singapore-based GoldSilver Central, said by e-mail.
Lan said that, absent news or data that could shift prices, gold is likely to remain between $1 225 and $1 255 an ounce ahead of the Fed and BOJ meets.
Holdings in exchange-traded funds backed by gold were little changed at 1 756.86 metric tons on Friday, data compiled by Bloomberg show. Investors have increased holdings by 20% this year. Bullion of 99.99% purity retreated as much as 1.1% to 257.5 yuan a gram ($1 231.07 an ounce) and was at 258.5 yuan on the Shanghai Gold Exchange.
Silver for immediate delivery, which entered a bull market last week, traded at $16.9705 an ounce, little changed from Friday. The metal rose to as much as $17.6973 on Thursday, the highest price since May 2015. Platinum fell 0.5% and palladium lost 0.7%.
