Gold prices, after last week’s choppy trade have begun to edge up higher, on hopes of Fed continuing its monetary stimulus. Also, Dollar’s continued decline, due to a slew of disappointing US data last week, has further boosted the gold prices. Still, investors seem wary of the two-day FOMC policy meeting, slotted for this week.

Last Week on Wednesday, Gold for August delivery dipped by 1.1% to close at $1,319.70 an ounce. But on Thursday, Bullion pared back its losses as it gained 1.43% to $1334.63, while the Gold for August delivery posted an intraday high of $1,331.90. Later on this weekend, Bullion plunged, with Gold futures for August delivery dropping by 0.6% to close at $1,321.50 an ounce. On Friday, the Silver prices too declined by 1.42% to $20.01 per ounce, by 21:00GMT.

Initially, last week the US New home sales came out positive, as it had increased in June, beating expectations. This pushed up the Dollar and dragged down Gold prices on Wednesday. Later, the US jobless claims data disappointed expectations, as it had increased by 7000 to 343,000. This bode well for Gold and the prices spiked. Again the US Consumer Confidence rose to 85.1 against an expected 84.0, its highest in six years. This caused Bullion to end the week in a trough.

Starting this week, on Monday, Bullion market was mixed with some gains and losses. The US Gold futures for August edged up by 0.5% to $1,328.40 an ounce, while the Spot Gold declined by 0.3% to $1,329 an ounce. Tracking the Gold futures, other precious metals like Silver gained by 1.9% to $20.10 per ounce, while Platinum climbed by 1.1 % to $1,441 an ounce, with Palladium prices increasing by 1.5 percent to $734 an ounce.

On Tuesday, Gold prices were quite passive with investors hesitant in placing bets ahead of the key FOMC meeting. The Spot Gold pared back its previous day losses, as it inched up by 0.05 % to trade at $1,327.71 an ounce by 0324 GMT.

Bullion’s choppy trade last week seemed to have settled down, as Gold prices firmed up with slight gains at the start of this week. But, the key Federal Reserve Policy meeting seems to have put Bullion market on a cautious pause. Furthermore, a Wall Street Journal report on the key FOMC meeting stirred up the markets. The report speculated that Fed will reaffirm its commitment towards keeping the interest rates low and mull over its decision to taper the QE policy this year end.

Other key policy meetings outcomes of the European Central Bank and the Bank of England are also awaited week and they are expected to continue their current monetary policy. These factors are keeping the investors on their toes. This made the Bullion market passive, with no remarkable movements among the Gold prices, compared to their volatility last week.

Thus, Dollar’s downtrend, due to some disappointing US economic data, initially pushed up the Gold prices last week. But later on, the rise in US consumer confidence index dragged down the Gold prices.

However, the recent US pending housing sales data has reported a 0.4% dip, according to the report from the National Association of Realtors. This indicates that the US economy has still not recovered enough for the Fed to change its current monetary policy. Therefore, further movement in the Bullion prices heavily depends on the FOMC meeting minutes, which will be released by this week.

Note: This blog is just an expression of the author’s opinion and cannot be deemed responsible for any losses incurred.