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Wednesday, January 25, 2012

impact Fed plans to raise interest rates on gold price

impact Fed plans to raise interest rates on gold price : Gold prices struggled Wednesday to hold recent gains as the dollar rose and investors awaited results of the Federal Reserve's two-day meeting on interest rates.

The U.S. central bank was expected to announce its plans for interest rates later Wednesday. Any sign the Fed plans to raise interest rates would boost the value of the dollar and weigh on gold prices. Alternatively, any sign that the bank intends to extend much beyond mid-2013 the time it holds interest rates near zero would hurt the dollar and thus support gold prices.

If the U.S. central bank simply maintains its present course without disclosing its future intentions, gold prices could slide.

"While gold prices have been relatively supported since the beginning of 2012, the yellow metal still has a lot to prove and investor patience may be starting to get stretched," UBS analyst Edel Tully said in a client note. "The 100-day moving average is still sloping downward and it is increasingly important for gold to overcome resistance and reverse this trend."

The Dollar Index, which measures the value of the greenback against a basket of major currencies, increased 0.31 percent to 80.28. The euro hovered around $1.30 but remained extremely vulnerable to negotiations among Greece, its creditors and Eurozone officials aimed at avoiding a default. For the latest updates on the stock market, visit Stock Market Today For the latest updates PRESS CTR + D or visit Stock Market news Today

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