The value of Gold

Gold is trading relatively sideways at the moment

Gold held steady even as stocks slumped and other metals declined as investors waited for signs on U.S. interest rates in a speech by a Federal Reserve governor due Monday.

Traders are caught between the prospect of higher rates, making gold less attractive, and indications of improving demand in China and India, the biggest buyers, according to Neil Meader, an analyst at Metals Focus Ltd. in London.

“Gold is trading relatively sideways at the moment,” Meader said. “The focus is shifting towards a Fed rate rise due to U.S. inflation concerns but there’s also signs of life from buyers in India and China creating a physical floor.”

On Friday, Fed Bank of Boston President Eric Rosengren said the economy could overheat should policy makers wait too long. Remarks by governor Lael Brainard Monday will be watched for any shift in stance.

Gold was barely changed at $1,327.52 an ounce by 11:11 a.m. in London, according to Bloomberg generic pricing. It fell 1.6 percent in the previous three trading days.

The odds of the Fed increasing rates at its Sept. 20-21 meeting rose to 30 percent last Friday, from 22 percent Wednesday, according federal funds futures contracts. Brainard’s speech is the last scheduled appearance by a central banker before this month’s policy meeting.

Investors will be drawn to gold even if the Fed lifts rates as rates will still be at low historical levels, State Street Global Advisors, manager of the largest exchange-traded fund backed by the metal, said on Friday.

In other metals:
Spot silver fell 0.7 percent, its fourth daily decline, to $18.9112 an ounce.
Platinum fell 1.1 percent to $1,049.84 an ounce.
Palladium fell 1.4 percent to $665.92 an ounce.
Source: Bloomberg