Gold Trades Near One-Week Low Before Fed Meeting

Gold traded near the lowest level in a week before Federal Reserve policy makers gather and as European finance ministers agreed to work with the new Greek prime minister to keep the country in the euro.

Bullion for immediate delivery traded 0.1 percent higher at $1,282.61 an ounce at 3:26 p.m. in Singapore, after dropping earlier to $1,272.44 an ounce, the lowest price since Jan. 19, according to Bloomberg generic pricing. The metal rose on Jan. 22 to $1,307.62, the highest level since Aug. 15, as the European Central Bank expanded stimulus.

The Federal Open Market Committee begins a two-day meeting today as policy makers weigh the timing of an interest-rate increase. Finance ministers in Europe began considering how to revive Greece’s rescue program and signaled their willingness to do a deal with Alexis Tsipras as long as he drops demands for a debt writedown. Gold has risen 8.3 percent this year amid speculation the Fed will hold off raising borrowing costs.

The “gold market’s focus may shift to the upcoming FOMC meeting,” James Steel, an analyst at HSBC Securities (USA) Inc., wrote in a note. “The market’s focus has been more so on global monetary policy expectations and less so on Greek developments. In the near term, bullion may continue to consolidate from gains made earlier in the year.”

Bullion for April delivery rose 0.2 percent to $1,283 an ounce on the Comex in New York, after falling earlier to $1,273, the lowest level for the most active contract since Jan. 20. Some 45 percent of 53 economists in a Bloomberg survey said the Fed will raise the benchmark rate in June.

The Netherlands left its gold holding unchanged last month, while Russia and Kazakhstan added gold to reserves in December, data from the International Monetary Fund showed. Turkey and Mexico were among nations that reduced holdings, according to the data.

Silver for immediate delivery increased 0.2 percent to $17.9513 an ounce. Platinum was little changed at $1,254.28 an ounce while palladium retreated 0.2 percent to $778.75 an ounce.

(Corrects penultimate paragraph to show Netherlands left its gold holding unchanged.)
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