As the Federal Open Market Committee prepares to adjourn two days of meetings today, the yellowish metal benefited from speculation about a steady amount of dollars flooding the market through early next year. As the precious metal and the dollar perform the inverse of one another, increased amounts of the greenback in the market drew down its value.
Also moderately benefiting the yellowish metal on Wednesday was economic data noting consumer prices rose 1.2 percent during the 52 weeks leading to September, according to the U.S. government. That marks the lowest advance since this past April.
"The consumer-price report is reinforcing the idea that there's no impending taper from the Fed," head dealer Frank McGhee with Integrated Brokerage Services LLC in Chicago told the news source on Wednesday. "Gold's getting a bit of a lift from that."
At 9:34 a.m. on Wednesday, gold futures increased 0.84 percent, an $11.31 advance to $1,356.36 per troy ounce.
Annual gain streak in jeopardy
With slightly more than two months remaining in 2013, bullion's annual gains streak is in peril. Thus far this year, gold futures have lost 19 percent of their value. Should the next 60-plus days not work in gold futures' favor, the annual gain streak would come to a close at 12 years.
The idea of gold futures gaining on commodity markets as the year proceeds is slim, one analyst told the news source.
"Even if not today, tapering will come," analyst Lv Jie with Cinda Futures Co. in China told the news source on Wednesday. "That's weighed on gold for most of this year, and we don't see it changing."
Commodity complex performs strongly
Reuters reports bullion was spearheading tradables' gains on the commodity complex as the Fed prepares to adjourn its two days of policy meetings and make the announcement.
Wednesday's gains come after the precious metal has climbed about 7 percent since the middle of this month, when it touched its lowest value in roughly 90 days.
Waiting on stronger data
MarketWatch reports analysts expect that Fed policy makers are waiting on more uplifting economic data prior to slashing the economy-spurring stimulus program. For that reason, the monthly purchase of $85 billion in debt per month is likely to continue as the program drives toward spurring development and growth in the world's largest economy in the aftermath of the Great Recession.
"Although practically no one is expecting anything of substance to come out of the Fed's decision, investors are nevertheless keen to see what the Fed will say with regard to the softening seen in some of the recent U.S. macro data and whether this will impact the central bank's tapering timeline — now widely expected to kick in sometime in the first or second quarter of next year," states a note authored by analyst Edward Meir with INTL FCStone, according to MarketWatch.
Analysts also noted the particular tone of the Fed statement once policy makers adjourn will shed light on what will be policy looking forward. The body could make reference to the desire to pull back debt purchases, which it has done previously.
In any case, the statement is likely to impact the performance of the yellowish metal as it enjoys upward drives.
Though gold futures "may rally if the Fed FOMC statement indicates the Fed has become more dovish, as pointed out before, we would expect the rally to fade if physical demand in Asia, and China in particular, is not strong," analysts with Standard Bank said on Tuesday, according to MarketWatch.
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