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Gold drops before Fed meet as bets tick up for rate hike in 2016
[SINGAPORE] Gold dropped for the third time in four days before a Federal Reserve meeting which may shed light on the timing of interest-rate increases, and as investors considered the outlook for stimulus from the Bank of Japan.
Bullion for immediate delivery fell 0.2 per cent to US$1,317.70 an ounce by 9:19 am in Singapore from US$1,320.26 on Tuesday, when it rose 0.4 per cent, according to Bloomberg generic pricing. The metal is up 24 per cent this year.
Gold's rally in 2016 has been trimmed as investors turn their attention to the Fed meeting and speculate whether the BOJ will ease policy. While traders are putting only 10 per cent odds on a rate increase at the Fed gathering that ends Wednesday, the probability for a December hike has inched closer to 50 per cent from just 15 per cent a month ago.
For Japan, four in five economists predict additional stimulus Friday - the most since Bank of Japan Governor Haruhiko Kuroda presided over his first policy meeting in April 2013.