Gold doesn’t seem to be trading on anything other than externally derived sentiment

The gold price advanced $6.85, or 0.4%, to $1,645.25 per ounce Tuesday morning as the U.S. dollar Index fell by a modest 0.3% to 79.155.  Silver rose alongside the price of gold, by $0.18, or 0.6%,t o $31.08 per ounce.  Strength in precious metals and the dollar’s weakness was driven in part by worse than expected data on the U.S. housing market.

Commenting on the outlook for the yellow metal, Nick Trevethan, senior commodities strategist at ANZ Bank, wrote in a note to clients that “Gold doesn’t seem to be trading on anything other than externally derived sentiment.  There is still pressure for gold prices. The market has been trying to push the support level at $1,630-$1,640, although the push is rather half-hearted right now.”
  
Looking ahead for the gold price, it is likely to stabilize ahead of Wednesday’s Federal Reserve meeting, according to Standard Bank’s head of commodity trading, Yuichi Ikemizu.  “We probably won’t see much move before the Fed meeting,” Ikemizu stated, “as people are sidelined and waiting for new cues from the Fed and Bank of Japan.”

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