Gold re­bounds; mar­ket eyes Fed, BOJ meet­ings

The Pak Banker - - MARKETS/SPORTS -

Gold bounced back on Mon­day, inch­ing closer to last week's 13-month high, ahead of cru­cial pol­icy meet­ings at the U.S. Fed­eral Re­serve and the Bank of Ja­pan that are likely to pro­vide di­rec­tion to the yel­low metal. Spot gold had risen 0.6 per­cent to $1,255.30 an ounce by 0643 GMT, while U.S. gold eased 0.2 per­cent to $1,256.5 an ounce. The main fo­cus is the U.S. Fed's pol­icy meet­ing on March 15-16, af­ter the cen­tral bank lifted rates for the first time in nearly a decade in De­cem­ber.

In­vestors in the pre­cious me­tals mar­ket are also keep­ing a watch on the Bank of Ja­pan meet. The BOJ's pol­icy board is set to dis­cuss this week whether to ex­empt $90 bil­lion in short-term funds from its newly im­posed neg­a­tive in­ter­est rate, peo­ple fa­mil­iar with the mat­ter said, af­ter the se­cu­ri­ties in­dus­try warned that in­vest­ment money would be driven into bank de­posits.

"We have two cen­tral bank meet­ings this week as the BOJ com­mence a two-day meet­ing to­day and the FOMC an­nounce their in­ter­est rate de­ci­sion on Wed­nes­day," said MKS Group trader Sam Laughlin.

Sup­port at $1,235 should keep the metal buoy­ant lead­ing into the Fed an­nounce­ment, while $1,275-$1,280 will likely cap any moves higher, the trader said.

Af­ter rolling out bold mea­sures to boost the euro zone economies, in­clud­ing in­creased as­set-buy­ing and a deeper cut to de­posit rates, ECB Pres­i­dent Mario Draghi on Thurs­day sig­nalled there would be no fur­ther rate cuts.

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