This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Gold Prices Slip Ahead of Fed Policy Meeting

NEW YORK ( TheStreet) -- Gold prices were moving lower Tuesday as traders await the Federal Reserve's latest policy-making statement.

Gold for December delivery at the COMEX division of the New York Mercantile Exchange was losing $5.70 to $1,323.90 an ounce. The gold price traded as high as $1,330.40 and as low as $1,317 an ounce, while the spot price was dropping $3.14.

Not much action is happening in the pits as traders appear to be waiting to see what happens with the Fed as well as the monthly U.S. jobs report scheduled for Friday morning, said Paul Sacks, principal gold trader at Aurum Options Strategies.

The Fed will release its policy statement Wednesday afternoon, an announcement that analysts and economists expect will offer few surprises. The central bank is expected to generally back current policy of buying roughly $85 billion in bonds per month to support financial lending. Nonetheless, traders will be searching for any language that hints at when the Fed may begin to cut-back on its monetary stimulus program.

Tapering of asset-backed purchases by the Fed is seen by many investors as negative for gold prices because gold often trades higher on the assumption that stimulus is an inflationary policy and makes gold the hedge against inflation.

Silver prices for September delivery were off 12 cents to $19.74, while the U.S. dollar index was climbing 0.16% to $81.83.

Traders are also anticipating the July monthly jobs report as it will give markets a clue as to whether the labor market's recent strong trend higher is sustaining through the summer months.

Improving labor market conditions has been a part of the Fed's dual mandate as it has stated it will keep the federal funds rate at historically low levels at least until the national unemployment rate reaches or goes below 6.5%. With the Fed's policy tied to jobs, gold traders see a big miss on the monthly report as a signal that the central bank will continue to sustain its current monetary policy -- which has a heavy amount of monetary stimulus. A bad report could send prices higher, while a strong survey could trigger investor selling out of the yellow metal and into other assets, such as stocks.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
ABX $11.64 0.00%
EGO $2.86 0.00%
GLD $112.32 0.00%
IAU $11.33 0.00%
KGC $2.30 0.00%


Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs