LONDON, Oct 29: Gold steady in Europe on Wednesday as traders awaited the Federal Reserve’s interest rates decision later in the day, but platinum slipped sharply on demand fears.
Spot gold was quoted at $748.80/751.30 an ounce at 1044 GMT, little changed from $744.30 in late New York trade on Tuesday.
We have the Federal Open Market Committee decision later in the day, and there is a lot of speculation of a cut, said Afshin Nabavi, head of trading at MKS Finance.
After a 66 per cent probability of a 50 basis point rate cut yesterday, interest rate futures now pencil in 62 per cent - which demonstrates the uncertainty of financial market participants, said Standard Bank analyst Manqoba Madinane.
The recent movements in both the equity and currency markets suggest some risk appetite is beginning the return, said James Moore, an analyst at TheBullionDesk.com.
This, coupled with the fact gold is considerably lower than at the start of the year and investors may look to further diversify their asset holdings, given recent events, may allow gold to begin recouping some of its losses.
Among other precious metals, platinum resumed its downward trajectory, diving more than 6 per cent in early trade as investors worried about the outlook for demand from carmakers.
Buying of the metal for use in catalytic converters accounts for more than half of global platinum demand, and reports of production cutbacks and falling sales among car manufacturers have wiped 65 per cent from the metal’s value since March.
There is little downside risk left in the platinum group metals sector since PGM metal prices are sufficiently low that supply is likely to be removed from the market, said investment bank Nomura in a research note.
Fears of a steep decline in global auto sales and hence autocatalyst demand, in view of a global recession, are already priced in to the extreme, it added.
Spot platinum fell to a session low of $755.50 an ounce, before recovering to trade at $800/830 from $809.00.
Palladium was at $183/193 from $176, having touched a high of $186 on speculation the sell-off in the metal was overdone.
Spot silver was at $9.24/9.34 against $9.16.—Reuters
