Commodity Gold Trade under $1800 per Ounce as Investors Sold Metal

Commodity gold traded below $1,800 an ounce as some investors sold the metal to lock in gains amid speculation the Federal Reserve may announce steps today to shore up the U.S. economy, eroding demand for a haven.

Immediate-delivery gold shed as much as 0.3 percent to $1,798.55 an ounce, and last traded at $1,801.15 at 10:08 a.m. Singapore time. The metal rose 1.4 percent yesterday, its biggest gain in eight days, on concern Europe’s debt crisis is worsening. It reached a record $1,921.15 an ounce on Sept. 6.

“Besides the debt crisis in Europe, one of the biggest drivers of the gold market is U.S. policy,” Yang Shandan, senior trader at Cinda Futures Co., said from Zhejiang, China. “The main concern in the U.S. is unemployment and they first need to fix that before worrying about the weakness of the dollar. We see some profit taking today before the Fed announcement.”

December-delivery bullion in New York lost as much as 0.5 percent to $1,800.20 before trading at $1,803.10 an ounce. The dollar was little changed against a six-currency basket after falling for the first day in three yesterday. The Dollar Index is down 2.6 percent this year as borrowing costs remained low.

Federal Reserve officials might propose new measures to galvanize the economy when the Federal Open Market Committee completes a two-day meeting. Ben S. Bernanke, the central bank’s chairman, told economists Sept. 9 in Minneapolis that policy makers have measures at hand and are “prepared to employ these tools as appropriate.”

Europe’s Crisis

In Europe, Greek Finance Minister Evangelos Venizelos made “good progress” in a second round of talks with the European Union and International Monetary Fund aimed at staving off default, the EU said in a statement late yesterday. Still, the International Monetary Fund cut its global growth estimate yesterday as “downside risks” from Europe and the U.S. grow.

“Gold is in a holding pattern at the moment, with strong buying support above $1,750,” said Yang, ranked second in a Futures Daily and Securities Times poll of China gold analysts. “We don’t rule out a test on the highs once the next wave of bad news hits.”

Cash silver traded little changed at $39.7325 an ounce. Spot platinum and palladium were also little changed at $1,776.93 an ounce and $716 an ounce respectively.

Category: 2011 gold market, Gold, gold bullion, gold commodity, gold investing 2011, gold price per ounce, gold trading