Tranquility is returning to the gold market.
After a 10-day selloff that sent prices to the lowest in five years, the pressure is starting to ease. Gold futures alternated between gains and losses in the last five days, and were down 0.3 percent to $1,093.10 an ounce at 9:41 a.m. on the Comex in New York.
“We’re in the calm after the storm,” Jens Pedersen, an analyst at Danske Bank A/S in Copenhagen, said by phone. “Now we’ll see if the bad weather will pick up again after the Fed meeting.”
Bullion fell 6.7 percent in July, putting the metal on track for the biggest monthly retreat in two years, on concern that demand from China is slowing and U.S. interest rates will soon increase. Prices will drop to $984 before January, according to the average estimate in a Bloomberg survey of 16 analysts and traders.
Federal Reserve officials will release a statement on Wednesday that may signal when they plan to start tightening. While economists see no chance the central bank will raise rates this week, they put the odds of a September increase at about 50 percent, a Bloomberg survey published July 22 showed.
Higher rates curb the appeal of bullion because it doesn’t pay interest like competing assets.
An average of 270,477 gold futures changed hands in the past seven days, according to exchange data compiled by Bloomberg. That’s almost 60 percent above the average of the past 12 months.
Gold assets in exchange-traded products have declined for nine days. Holdings shrank 3.4 percent this month, heading for the biggest drop since December 2013, according to data compiled by Bloomberg as of Tuesday.
Silver futures for September delivery added 0.2 percent to $14.665 an ounce on the Comex. On the New York Mercantile Exchange, platinum and palladium declined.