Gold may advance, rebounding from the biggest drop in four weeks

Gold may advance, rebounding from the biggest drop in four weeks, as the U.S. central bank is set to release interest-rate forecasts for the first time, potentially weakening the dollar and boosting commodities demand.

Spot gold was little changed at $1,665.52 an ounce at 12:53 p.m. inSingapore after rising as much as 0.4 percent earlier. The precious metal dropped 0.7 percent yesterday, the most since Dec. 28. Gold for February delivery was also little changed at $1,665.70 an ounce on the Comex in New York.

The dollar traded near the lowest level in three weeks against the euro before the Federal Open Market Committee releases the forecasts later today. That helped to drive Asian stocks, copper and oil higher.

“It’s all about the dollar,” said Nick Trevethan, an analyst at Australia & New Zealand Banking Group Ltd. “This is the first time the FOMC is giving its forecast, and I think people are keen to see what it looks like.”

The Fed said last week it will offer two charts along with the forecasts for the benchmark rate, which will remain unchanged today, according to a Bloomberg survey of economists. The central bank has left its target for overnight loans between banks in a range of zero to 0.25 percent since 2008 and last month reiterated that economic conditions may warrant “exceptionally low” rates at least through mid-2013.

Cash silver climbed as much as 0.6 percent to $32.2575 an ounce, before trading at $32.2113 an ounce. Spot platinum fell for a second day, after touching the highest level since Dec. 2 yesterday, dropping 0.2 percent to $1,548.75 an ounce.

Palladium was little changed at $680 an ounce, after reaching a four-month high yesterday. The Shanghai Futures Exchange is closed for the Lunar New Year holiday. – Bloomberg

Tags: Gold analysis, Gold future prices, Gold futures, Gold investment, Gold news, Gold price, gold price forecast, Gold prices, price of gold, Spot gold, Spot gold price

Posted by admin on Jan 25 2012. Filed under Gold price. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry