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Gold snaps three days of declines before release of FOMC minutes
[SINGAPORE] Goldsnapped three days of declines as investors await the release of minutes from the last Federal Open Market Committee (FOMC) meeting for further clues on the central bank's views.
Bullion for immediate delivery advanced as much as 0.8 per cent to US$1,209.87 an ounce and traded at US$1,207.28 by 1:06 pm in Singapore, according to Bloomberg generic pricing.
The metal surged to US$1,263.48 on Feb 11, the highest level since Feb 2015, before posting three days of losses.
Gold has benefited from the equity turmoil this year, which has boosted demand for a haven and reduced bets on higher US borrowing costs. The minutes of the Fed meeting on Jan 26-27 are released Wednesday and may give indications on the balance of views within the committee.
Inflows to exchange-traded funds this year have already exceeded the decline in 2015.
Markets are "waiting for the Fed minutes," Barnabas Gan, an economist at Singapore's Oversea-Chinese Banking Corp, said by phone. He said he didn't expect the Fed to give concrete guidance on the timing of the next rate hike.
Fed Bank of Boston president Eric Rosengren said Tuesday that turmoil in financial markets and weak global growth could slow progress toward the Fed's policy goals and Patrick Harker, president of the Fed Bank of Philadelphia, said he'd be in favor of delaying further interest-rate increases.
While the metal looks overbought in the near term, there's more upside for prices on reduced expectations for higher rates and the potential for further turmoil, according to DBS Group Holdings Ltd.
Singapore's largest bank is still overweight on bullion while Goldman Sachs Group Inc this week reiterated its forecast that gold will tumble.