Gold Loses Momentum As Narrow Trading Week Kicks off
Gold prices dipped in Asia on Monday as investors head into a holiday-thinned trading week expecting continued downward pressure on the precious metal.
Gold for February delivery on the Comex division of the New York Mercantile Exchange fell 0.14% to $1,063.50 a troy ounce.
Also on the Comex, silver futures for March delivery dropped 0.33% to $14.050 a troy ounce. Elsewhere in metals trading, copper for March delivery gained 0.35% to $2.117 a pound.
The Asian nation is the world’s largest copper consumer, accounting for nearly 45% of world consumption.
In the week ahead, trading volumes are expected to remain light due to the Christmas holiday and as many traders already closed books before the end of the year, reducing liquidity in the market and increasing the volatility.
The U.S. is to release key reports on gross domestic product, durable goods orders, home sales and jobless claims.
Last week, gold bounced back from the prior session’s two-week low on Friday, boosted by a weaker U.S. dollar, as markets continued to digest the Federal Reserve’s decision to raise interest rates for the first time in nearly a decade.
In a unanimous decision, the Fed raised interest rates to a range of 0.25% to 0.50% from a range of 0% to 0.25%, as widely expected, following the conclusion of its policy meeting on Wednesday.
Speaking at a press conference following the announcement, Fed Chair Janet Yellen vowed that the FOMC will not be mechanical in its approach to normalize monetary policy and that future rate hikes would be gradual and data dependent.
In its latest median projections, the FOMC anticipates that the Fed Funds Rate will reach 1.375% by the end of 2016, implying four quarter-point hikes next year. The Fed funds futures currently suggests there will be just two rate hikes in 2016, one in June and one in December.