GOLD FLAT, SILVER SCORES GAINS

GOLD PRICES traded in a tight range yesterday as the possibility that the US Federal Reserve would hint at an early tapering of its bond-buying support for the US economy set a cautious tone in the market.

Spot gold price was little changed at $1 860.21 (about R25 626) an ounce at 4pm, having slid to its lowest level since May 17 at $1 843.99 on Monday. By 6.10pm, gold was at $1859.73.

US gold futures rose 0.2 percent to $1 859.20.

In a new statement and economic projections due last night, Fed policymakers were expected to discuss when and how fast to pare back the central bank’s massive bond-buying programme in the face of a recovering economy and rising inflation.

“The markets are realising that the economic recovery is pretty robust and what we’re probably going to see is this (Fed) tapering discussion is going to start now,” said Edward Moya, senior market analyst at Oanda.

While the Fed was expected to make an announcement that it was tapering its asset-buying programme at the end of the summer or in September, it would likely remain fairly accommodative over the next 12 months, which should support gold, Moya said, adding that inflation fears could also boost bullion’s appeal.

Concerns about rising prices have risen in the face of US data showing a recent spike in consumer and producer prices.

StoneX analyst Rhona O’Connell said in a note that market participants would also focus on any comments over inflation risks.

Gold was also pressured by a steady dollar, which dimmed the precious metal’s appeal to other currency holders.

Elsewhere, silver rose 0.5 percent to $27.78 an ounce, while palladium gained 1.3 percent to $2 797.84 and platinum was down about 0.7 percent at $1 144.99.