Gold prices fell on Wednesday as traders circled the wagons ahead of Janet Yellen’s first FOMC press conference later in the day, while a mining executive said everyone is worried over nothing with regards to China’s copper demand.
The Federal Reserve chairwoman is widely expected to stick to the tapering plan, but investors will be sniffing around for any clues as to how the central bank sees global events and this winter’s brutal weather impacting the economy. The press conference starts after the close of Comex.
At last check, gold for April delivery was off $13, or 1%, to $1,345.30 an ounce, while May silver fell 15 cents, or 0.7%, to $20.71 an ounce.
A day earlier, a refreshed appetite for equities pushed gold down 1% to its lowest level in a week, with easing fears about Ukraine and Russia making for more of a risk-on environment.
Jim Wyckoff of Kitco News said this kind of “backing and filling” that we’re seeing on gold’s daily chart is to be expected and the bulls still hold a technical advantage.
“This situation [in Russia] is still far from stable,” he wrote. Any escalation of tensions in Ukraine would quickly put keen risk-aversion back into the market place.
High-grade copper was again under pressure, with the May contract HGK4 -1.10% down 2 cents, or 0.8%, to $2.9125 a pound.
While copper is the worst performing commodity hands down this year so far, off 13%, investors may be betting the wrong way, said Javier Targhetta, senior vice president for marketing and sales at Freeport-McMoRan Copper and Gold Inc.