Yahoo Finance Gold Slips, Halting 2-day Climb; $1,250 Still in Sight
Investing.com - Gold prices fell on Wednesday after a two-day climb as a rallying dollar took some of the bullish support from the precious metal as the Federal Reserve released details from its latest policy meeting.
But analysts said they saw no major hurdles in bullion's path towards its next target of $1,250 an ounce.
In one of its most extraordinary performances in years, gold has held its own against the dollar amid a series of rate hikes planned by a distinctly hawkish Federal Reserve.
The dollar index, which measures the greenback against a basket of six currencies, rose nearly 0.5%, its most in three weeks.
After falling from a 2018 peak of $1,343.80 in February, gold returned to $1,200 in August. Since then, it has more or less held its ground there despite a rate increase in September, which the Fed likely to follow with another in December and three more in 2019.
"The price of gold hasn’t retreated and tested its support level at $1210. And that’s good news," said Walter Pehowich, executive vice president at Dillon Gage Metals in Addison, Texas.
The Fed minutes reaffirmed the FOMC's commitment to a steady rise in rates, noting that "(f)urther gradual increases in the target range for the federal funds rate would be consistent with a sustained expansion of economic activity."
U.S. gold futures' most-actively-traded contract, December, settled down $3.60 at $1,227.40 on the COMEX division of the New York Mercantile Exchange. It hit a two-and-a-half-month high of $1,236.90 on Monday.
A surfeit of geopolitical tensions have supported gold over the past three weeks, including Saudi Arabia's crisis over the disappearance of an allegedly murdered journalist, China's trade war with the United States and Italy's budget woes that could affect the eurozone.
U.S. bond yields have also hit multiyear highs, restraining the dollar from rallying, to gold's advantage, despite a hawkish Fed.
Gold was also seeing strong support from speculators attempting to push it to $1,250 or beyond ahead of the expiration of options on Oct. 25, traders said.
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