Gold Dips Below $1,200, Oil Rebounds on Bullish Inventory Data

Gold fell below $1,200 during morning trade in North America on Wednesday as investors await the Federal Reserve’s decision and Fed Chair Janet Yellen’s remarks on the future path of interest rate hikes.

Gold and Oil

Gold futures lost 0.2%, or $2.65, to $1,199.55 per troy ounce. Spot gold, on the other hand, gained $2.20 to trade at $1,200.50 per troy ounce.

The Fed is expected to raise rates by a quarter point after its policy meeting this afternoon.

The central bank will also release its forecast for interest rates and economic growth. Fed Chair Janet Yellen will hold a 30 minute press conference after the Fed’s statement.

In other metals news, silver futures held at $16.92 per troy ounce. Platinum fell 0.1% to $938.35. Palladium gained 0.4% to rade at $744.98 per ounce.

Copper gained 0.1%, or 2.6 cents, to $2.661 per pound.

Oil Prices Gain

 

Meanwhile, oil prices gained in European morning trade after industry data showed an unexpected draw in U.S. stockpiles.

The American Petroleum Institute on Tuesday said oil inventories in the U.S. declined by 530,000 barrels last week. The report also showed a decline of 3.9 million barrels in gasoline.

The API’s report comes before the U.S. Energy Information Administration’s official oil supplies report, due later this morning.

A draw would mark the first decline after nine consecutive weeks of stockpile gains.

U.S. crude for April gained 72 cents, or 1.5%, to $48.44 per barrel. Brent oil for May delivery gained 62 cents to trade at $51.55 per barrel. Brent sank to its lowest level since November in the previous session to trade at $50.25 per barrel.

Oil fell on Tuesday after OPEC said its members produced 31.95 million barrels per day last month, down 139,500 barrels per day from the previous month. Saudi Arabia, however, increased production by 263,000 barrels per day, reversing its cuts by a third.

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Anthony Young

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