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Gold hits session low after FOMC meeting minutes

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Shutterstock photo - Gold futures fell to the lowest levels of the session during U.S. morning hours on Wednesday, after minutes from the Federal Reserve's March policy-setting meeting showed officials remained divided over how long they should stick to their ultra-loose monetary policy.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,576.45 a troy ounce during U.S. morning trade, down 0.65% on the day.

Comex gold prices fell by as much as 1% earlier in the session to hit a daily low of USD1,574.45 a troy ounce.

Gold prices were likely to find support at USD1,539.85 a troy ounce, the low from April 4 and an 11-month low and resistance at USD1,604.25, the high from April 2.

Minutes from the Fed's March 19-20 meeting showed that a number of FOMC participants saw QE tapering around midyear, while others believed it would probably be appropriate to slow purchases later in the year and to stop them by year-end.

One member wanted to slow the bond purchases immediately, while two members indicated that the purchases might well continue at the current pace at least through the end of the year.

The minutes were released at 9AM Eastern time after it was revealed that they released to Congressional staffers and lobbyists on Tuesday. They were originally scheduled for release at 2PM.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank could bring quantitative easing, one of the biggest boosts to gold's bull run, to an end this year.

Prices came under additional pressure after Goldman Sachs slashed its three-month gold price forecast to USD1,530 per ounce from a previous estimate of USD1,615 per ounce.

The bank also lowered its 12-month price forecast to USD1,390 from USD1,550.

The bank expected gold prices to average USD1,545 per ounce in 2013, down from a previous forecast of USD1,610 a troy ounce. For 2014, Goldman projected average prices to fall to USD1,350 from an average of USD1,490 expected previously.

"Despite resurgence in euro-area risk aversion and disappointing U.S. economic data, gold prices are unchanged over the past month, highlighting how conviction in holding gold is quickly waning," the bank said in a note.

Elsewhere on the Comex, silver for May delivery fell 0.95% to trade at USD27.62 a troy ounce, while copper for May delivery shed 0.8% to trade at USD3.414 a pound.

Official trade data released earlier showed that China posted a USD884 million surprise trade deficit for March compared with February's USD15.25 billion surplus. Economists had expected a USD15.4 billion surplus.

The data showed that Chinese imports rose 14.1% from a year earlier in March, blowing past expectations for a 6% increase and following a decline of 15.2% in February.

Exports grew 10% from a year earlier in March, below expectations for an 11.7% gain and down from a 21.8% increase in the previous month.

China is the world's largest copper consumer, accounting for almost 40% of world consumption last year. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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