Gold hit fresh highs this morning (Monday September 19) ahead of meetings this week at the Bank of Japan and the US Federal Open Market Committee (FOMC).
At 08:30 this morning, gold was valued at £1,008.67 per troy ounce, jumping back from a dip over the weekend.
Investors will be watching the US Federal Reserve’s two-day meeting carefully. The Fed will announce on Wednesday whether it is raising interest rates – something most market analysts are not expecting to happen until December.
The Bank of Japan also holds its monetary policy meeting on Wednesday, when it is expected to take some easing measures although it is not clear yet what these may be.
MKS Group told Bullion Desk: “The [precious] metals are likely to trade heavily leading into the FOMC meeting this week and may see whippy price action around Wednesday’s BoJ announcement.”
The US Consumer Price Index (CPU), which measures inflation, was up in August ahead of market expectations. However, analysts are still confident that the cost of borrowing will not be raised in the US until the end of the year.
ANZ Research spoke to the news source: “We see the CPI figures as not being enough for a September Fed hike, but leaving a December hike odds-on and bolstering the case for drawing some battle lines, shifting the market away from liquidity-driven support to the economic fundamentals. That’s an environment where volatility will remain elevated.”
Investors also turned to gold for its safe haven properties following a bomb blast in New York on Saturday, in which 29 people were injured. It has increased concerns about terrorism attacks in the city, where global leaders are meeting for the 71st session of the UN General Assembly.
The gold rally extended to other precious metals, with silver, platinum and palladium making gains in strong trade.
