Gold known as the ‘Yellow Metal’ and considered as the hedge against inflation during investment dilemmas; is a precious metal which have generally been responsive towards the Fed’s decision. The FOMC meeting held on 29th and 30th of October on Tuesday and Wednesday is likely to publish the statement today afternoon. With the news of the FOMC meeting, gold has shown its downward trend amid the increased demand in the Asian economies.

The Dollar Index scaled up by 0.5% on Tuesday and positioned at 79.618 whereas the euro slide to USD 1.3748 from USD 1.3833 showing a stronger green currency. Investors have been on a belief that the Fed will delay the tapering off of massive bond-buying stimulus program till next year’s March. But still the investors and markets have fear of the Fed’s dovish outlook and its statement to be published. 

The gold bullion for immediate delivery dropped by 0.6% yesterday. Similarly, gold for December delivery fell by 0.5% on the COMEX. The high demanding nation for gold bullion, China experienced a drop in their volumes for cash gold of 99.99% purity on Shanghai Gold Exchange. Only 7,879 kgs of gold were traded as compared to the average data of 12069 kgs last month. The Chinese investors are on a further look for the gold prices to run down so that they can buy the gold. But their sentiments are hurt as the gold prices instead of moving downwards are still rising.

As the continuation of the stimulus program is seen to be friendly towards the gold prices as investors get access to credit for investment, the fear of the reduction of the monetary stimulus still affects the prices for gold. Considering the factors affecting the gold prices, the US economic data moving on a slower growth pace, the Fed’s decision to cut down the stimulus program can be seen far away. This shows that the Fed’s decision to continue the stimulus package i.e. Quantitative Easing (QE) to continue and thus undermines the strong US Dollar whereas supports the gold prices on the bullish trend. Yet, the Fed’s statement is to be waited till it is flashed in the market.