Gold Up Ahead of Fed’s Policy Statement | Wibest Broker

Gold futures were edging higher in commodities on Wednesday. Investors were positioning ahead of a Federal Reserve statement that’s likely to prove mostly bullish for long-term metals investors.

Markets are expecting the Fed to indicate continued support even if it isn’t expected to change interest rates. This is from a range between 0% and 0.25%. 

The central bank’s statement will come about a half-hour after metals settle on Comex.

Against that backdrop, December gold GCZ20, +0.47% GC00, +0.47% picked up $6.10. That was 0.3% at $1,972.40 an ounce, after rising 0.1% on Tuesday. It marked the highest most-active contract settlement since Sept. 1.

December silver SIZ20, +0.47% SI00, +0.47% rose 7 cents. That was 0.2%, at $27.535, following a 0.4% climb in the previous session.

Gold and silver could face some resistance. That is if the Fed and other central banks significantly upgrade their projections for economic growth. This may weigh on metals according to precious metals experts.

Traders are expecting that the Federal Reserve will upgrade its growth forecast. This was from a note by Chintan Karnani, analyst at New Delhi-based Insignia Consultants in a Wednesday research report.

Gold needs to trade over $1983.70 till tomorrow, to rise to $2024.10 and $2100.30, Karnani further noted.

While Gold Eyes a Fed Nudge, Oil Gets a Short-term Lift

Oil futures jumped in energy commodities on Wednesday. It was lifted by data from a trade group showing an unexpectedly large drop in U.S. crude inventories. Hurricane Sally curtailed production in the Gulf of Mexico.

West Texas Intermediate crude for October delivery CL.1, 1.93%   CLV20, +1.82%  rose 88 cents. This was 2.2% to $39.16 a barrel on the New York Mercantile Exchange. 

November Brent BRN.1, +1.67%   BRNX20, +1.67%, the global benchmark, was up 86 cents. And this was 2.1%, to $41.39 a barrel on ICE Futures Europe.

Crude oil is ripping higher on unexpected monster API crude oil draw and shut-ins from Hurricane Sally. Moreover, a positive adjustment to the OECD global forecast to -4.5% from -6.0% in June. This was from a note by Robert Yawger, director of energy at Mizuho Securities.

Meanwhile, It will also be interesting to see how the dollar and gold respond to the Fed later today.