Gold futures look set to snap string of losses – MarketWatch

Gold futures climbed on Thursday, poised to end a string of losses that took prices to their lowest level in a month as investors continued to look for hints on the outcome of the Federal Reserve’s policy meeting next week.

Gold for December delivery

GCZ5, +0.62%

 picked up $7.70, or 0.7%, to $1,107.80 an ounce on Comex. Prices fell to their lowest settlement level since Aug. 7 on Wednesday, which marked their 10th loss in a dozen sessions.

The push higher for gold comes as U.S. stocks are turning higher, reversing downward momentum earlier in Thursday’s session. But a turnaround for gold might not be long lasting, analysts predict.

The futures market may be waiting on the Fed announcement, but “physical demand remains robust internationally as bullion buyers continue to stack in anticipation of higher prices,” said Mark O’Byrne, executive director at GoldCore, based in Dublin.

“Bullion buyers expect higher prices due to a combination of geopolitical, macroeconomic and monetary risk,” he said. Those include an increasingly volatile Middle East, which appears to be “on the brink of a war”—and this comes at a time of deep tensions with an increasingly assertive Russia, he said.

The gold market is also in a “seasonal ‘sweet spot’ for gold” in the autumn period, before Indian festivals and Lunar New Year, said O’Byrne. China and India are two of the biggest buyers of physical gold.

Even so, Chintan Karnani, chief market analyst at Insignia Consultants in New Delhi, believes gold is “not out of the woods yet.”

“Gold is all about FOMC meet next week,” he said. The next big U.S. economic data release is the August retail sale number on Tuesday. We have a data vacuum till then.”

BNP Paribas cut its 2015 outlook for gold by $15 and is expecting an average price of $1,145 an ounce. It also reaffirmed its view that the precious commodity will see a downturn through 2017, particularly as interest rates are expected to be raised in the U.S.

Although analysts at BNP aren’t forecasting a rate increase as early as September, the bank does anticipate that U.S. interest rates will be lifted sometime this year.

Read: Hilsenrath says Fed can’t agree on September rate increase

Higher rates are a boon for the dollar but make dollar-denominated assets like gold more expensive to purchasers in other currencies.

In other metals, December silver

SIZ5, +0.47%

 gained 5.9 cents, or 0.4%, to $14.635 an ounce and December high-grade copper

HGZ5, +0.62%

 traded at $2.452 a pound, up 1.5 cents, or 0.6%.

October platinum

PLV5, +0.32%

 added $3.20, or 0.3%, to $984.40 an ounce, while December palladium

PAZ5, +2.01%

 tacked on $9.10, or 1.6%, $587.05 an ounce.