FX Market Watch News - Gold Futures Range-Bound on Markets in Light of New Policies

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Gold futures held steady in range-bound trade during the Asian, European and American trading sessions in recent weeks as market participants awaited the outcome of a meeting of Federal Reserve policy makers.

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InvestTechFX financial experts reported that on the Comdex division of the New York Mercantile Exchange, gold futures for June delivery traded at lower during most sessions, easing down overall.

Market participants were looking ahead to the outcome of the Federal Reserve's two-day policy-setting meeting for end of April 2012.

While the Federal Reserve is expected to reiterate its intent to hold U.S. interest rates near zero through 2014, forex currency traders will be seeking clues towards the bank’s attitude on further quantitative easing measures; fx traders in the interim are hoping there might be some show of support for a third round of bond purchases to support the U.S. economy.

In the previous rounds of asset purchases by the Federal Reserve weakened the dollar somewhat and sent gold prices soaring to an all-time high per ounce in September 2011.

Moreover, gold can benefit from such an environment of easy money because of expectations that ample liquidity would put a damper on the value of paper currencies.

The forex precious metals rallied a 2012 high in late February after the Federal Reserve at the time said it would keep interest rates near zero until at least by the end of 2014.

Currently gold prices ended higher on average on the markets over the past couple of weeks as investors were relieved when a successful auction sent yields on the Dutch debt lowered a day after the government in the Netherlands collapsed in a crisis over budget cuts.

InvestTechFX additionally reported that gains were limited after an auction of Spanish short term government debt saw the country’s borrowing costs almost double, while Italy’s borrowing costs rose to the highest level since January after an auction of government bills.

Although gold’s appeal as a safe haven is boosted during times of economic uncertainty, the euro zone’s debt crisis has done little to bolster appetite for the precious metals in recent months which a weakening euro and stronger dollar have weighed on gold instead.

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