'Gold, Silver likely to back and fill while awaiting FOMC outcome'

Gold  |  2012-09-13 09:04:17   |   By

Gold is likely to consolidate as the market awaits the outcome of this week's Federal Open Market Committee meeting, said HSBC Holdings plc (HSBC) in a snippet.

NEW YORK (Scrap Monster): Gold is likely to consolidate as the market awaits the outcome of this week's Federal Open Market Committee meeting, said HSBC Holdings plc (HSBC) in a snippet.

'Gold has rallied in the last two weeks (on) expectations that some form of additional easing will be announced at the meeting,' the British bank added.

'Until the FOMC results are known, we expect gold and silver to 'back and fill' with the emphasis on slightly lower prices. We believe the steep rally in the last two weeks and the build in net long positions on the Comex leave plenty of room for a little cautious profit taking,' the bank added.

But while the market's big focus is the FOMC, other scheduled events this week also have potential to move gold prices depending on their impact on the currency markets, particularly the euro, HSBC noted.

“These include a German constitutional court decision on the legality of the European Stability Mechanism, Dutch parliamentary elections, a meeting of Group of 20 finance ministers and a meeting of central bankers in Mexico and a eurozone finance ministers meeting at the end of the week,” HSBC concluded.