Gold prices fell for the first time in four sessions as investors awaited signals on whether Federal Reserve policy makers will expand monetary stimulus as they start a two-day meeting today.
Forty-eight of 49 economists surveyed by Bloomberg predict the Federal Open Market Committee will purchase Treasuries to bolster an existing program to buy $40 billion in mortgage bonds each month. The panel pledged in October to continue that plan until the labor market improves “substantially.”
“There is not much in terms of data flow to give markets direction today, so we could see further volatility as the Fed commences its two-day meeting,” Marc Ground, a Johannesburg-based commodity strategist at Standard Bank Plc, said in a report today.
Gold futures for February delivery slid 0.3 percent to settle at $1,709.60 an ounce at 1:34 p.m. on the Comex in New York. Prices capped a third straight session of gains yesterday, the longest rally since Aug. 27.
Holdings in gold-backed exchange-traded products reached a record 2,629.3 metric tons yesterday, data compiled by Bloomberg show. Prices are set for a 12th consecutive annual gain as central banks from the U.S. to China pledge more steps to spur economic growth.
The Fed is scheduled this month to end Operation Twist, in which it swaps $45 billion of short-term Treasuries each month for longer-term government debt.
“Speculation is rife that as Operation Twist ends, the Fed will consider expanding its asset purchases,” David Govett, head of precious metals at Marex Spectron Group in London, said in a report. “If this were to happen, then it should provide an upward impetus for the precious metals.”
Silver futures for March delivery fell 1.1 percent to $33.017 an ounce, the first decline in five sessions.
On the New York Mercantile Exchange, platinum futures for January delivery gained 1 percent to $1,640 an ounce, capping a fifth straight gain.
Palladium futures for March delivery declined 1.1 percent to $696.80 an ounce.