Gold prices edged higher on Wednesday, rebounding from five-week lows, as traders looked ahead to the monetary policy meetings of the European Central Bank and the Federal Reserve Bank.
However, a firm trend in stock markets and a strong dollar limited gold’s uptick. The dollar index rose to 98.75 around mid morning, and was last seen moving around 98.65, still up with a solid gain of about 0.32%.
The ECB is scheduled to announce its rate decision tomorrow. The bank is widely expected to announce additional stimulus to revive euro area economic growth.
The Federal Reserve’s policy announcement is due next week. With the central bank’s chief reiterating recently that the bank will act “as appropriate” to support economic expansion, markets hope for a reduction in interest rate.
Also, the U.S. President Donald Trump tweeted this morning that the “Federal Reserve should get out interest rates down to Zero, or less, and we should then start to refinance our debt.”
Gold futures for December ended up $4.00, or about 0.3%, at $1,503.20 an ounce.
On Tuesday, gold futures for December ended down $11.90, or about 0.8%, at $1,499.20 an ounce, the lowest close in about five weeks.
Silver futures for December ended down $0.016, at $18.170 an ounce, while Copper futures for December settled at $2.6145 per pound, down $0.0135 from previous close.
On the trade front, China announced that it would exempt 16 American-made products from tariffs as a sign of goodwill ahead of resumption of next round of trade talks between the two countries.
The list included varities of animal feed such as alfalfa and fish meal, a couple of cancer drugs, base oil for lubricants and lubricating grease, and some farm chemicals.
However, there is a bit of disappointment in the U.S. as the list does not include soybeans and other agricultural goods.
In economic news, a report released by the Labor Department on Wednesday showed a modest uptick in U.S. producer prices in the month of August.
The report said producer price index for final demand inched up by 0.1% in August after rising by 0.2% in July. Economists had expected prices to come in unchanged.
Meanwhile, wholesale inventories in the U.S. showed a modest rebound in the month of July, rising 0.2%, after edging down by a revise 0.1% in June, according to a report released by the Commerce Department.
The material has been provided by InstaForex Company – www.instaforex.com