Economy

Gold slips to two-week low ahead of Fed meet

Gold slips to two-week low ahead of Fed meet”

The Nikkei average advanced 389.88 points, or 1.96 percent, to end at 20,299.38, topping the 20,000 threshold for the first time since August 7 on a closing basis and hitting its highest finish since August 18, 2015.

The MSCI All-Country World Index increased 0.3% to the highest on record.

The U.S. dollar index, which measures the greenback's strength against a basket of six global currencies, slipped 0.15% to 91.98 during Asia trading hours while benchmark 10-year Treasury bond yields were marked at 2.24%, some 22 basis points from their early September lows in the immediate wake of Hurricane Harvey.

Last week was the greenback's best against the Japanese currency since November, up 2.8 percent, as a rise in US yields bolstered its appeal and data showing a pick up in USA consumer prices helped rekindle expectations that the Fed could hike rates again in December.

Signals the Federal Reserve will hike U.S. interest rates again this year and begin the "Great Unwinding" of a decade of aggressive stimulus, drove the dollar to a two-month high versus the yen on Thursday and sent bonds and commodities lower. Attention will turn to Wednesday's Fed decision, with a focus on details on unwinding part of the central bank's $4.5trn balance sheet. Sydney and Singapore each shed 0.1 percent, while and Seoul was 0.2 percent down.

The dollar erased earlier losses against the yen following the announcement. The market is pricing in an approximately even chance of a hike in December.

"In general gold is struggling a bit to move higher, so overall I expect a test of $1,300". Prices of oil, one of Canada's major exports, gave up some recent gains before a meeting of oil producers that could extend production limits aimed at clearing a glut.

In early European trade London rose 0.1 percent while Paris and Frankfurt were flat.

Investors are now preparing for potentially more hawkish statements from the Federal Reserve after its two-day policy meeting ends on Wednesday, especially after the Bank of England surprised investors last week with talk of a possible rate hike. The Nasdaq composite added 0.1 percent to 6,461.32.

The typical higher rates increase the dollar scenario played out yesterday as investors managed to rekindle their lost excitement on the promised of adding another interest rate hike this year, and stronger dollar weighs heavily on the price of gold.

Gold futures were at $1,311.56 an ounce after climbing 0.3 percent on Tuesday.

Oil prices settled almost flat on Thursday, the eve of a meeting of major oil-producing countries in Vienna to discuss whether they will extend production limits that have helped reduce the global crude glut.

US crude futures were down 1 cent at $49.90 per barrel, within sight of Thursday's almost four-month high of $50.50.



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