Gold futures ease modestly but quickly stabilize
Bullion prices dipped on Wednesday, 17 September 2014 at Comex on concerns about a stronger dollar ahead of the Federal Reserve policy statement and in response to Barclays lowering its gold forecast. Gold futures eased modestly but quickly stabilized after a policy statement and forecasts from the Federal Open Market Committee that retained the considerable time language for when interest rates might rise but nevertheless was seen as ever so slightly setting markets up for eventual increases.
Gold for December delivery ticked down 80 cents, settling at $1,236.70 an ounce.
December silver fell 7.1 cents to $18.65.
The central bank left interest rates unchanged and continued to whittle down its bond-buying program, often referred to as quantitative easing, by another $10 billion a month, as was expected. As expected, the Fed reduced the monthly pace of its asset purchases by $10 billion to $15 billion, setting expectations for the program to be wound down at the next meeting. Furthermore, the Fed maintained the "considerable time" language in its forward guidance, suggesting the first rate hike remains somewhat distant. On that note, the economic projections that were also released indicated the Fed sees the fed funds rate at 1.375% at the end of 2015.
Earlier in the day, the gold market showed little reaction to early-morning U.S. economic data as traders awaited the Fed. Consumer prices fell 0.2% last month. Excluding food and energy, CPI was unchanged.
Barclays cut its fourth-quarter 2014 quarterly average forecast for gold to $1,220 an ounce and its average 2014 price to $1,270 an ounce. For 2015, the analysts see price risk skewed to the downside, with average prices set to reach only $1,180 an ounce.
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