(Reuters) – On Tuesday, gold prices stabilized, cutting back on earlier losses as the dollar dropped against other major currencies, but continuing in a slight range before the minutes of the U.S. Federal Reserve’s July meeting on Wednesday.
News from the Fed is carefully watched for signs around the outlook for U.S. monetary policy, a key of changing gold prices, as rumor around mounts that the bank could taper its $85 billion monthly bond-buying program as early as September.
Spot gold was at $1,366.14 an ounce at 1034 GMT, slightly changed from $1,365.48 late on Monday, whereas U.S. December gold futures delivery increased 50 cents at $1,366.20 an ounce.
The dollar index dropped 0.3% and world shares also fell to their lowest in more than a month on Tuesday on hesitation ahead of the release of the Fed minutes on Wednesday.
Peter Fertig, a consultant at Quantitative Commodity Research said “I don’t think the minutes will provide a clear signal about the September taper. If they could have, they would already have done so in the FOMC statement,” he also added “We will just get a reflection of the discussion, and we already know that some members would vote to start the tapering, and others would like to wait and see. It will be further waiting and further speculating,”
Gold dropped as low as $1,352.20 an ounce in earlier trade. The London A.M. fix is at $1,365.75.
Gold buying from China, the world’s second largest bullion consumer, traders said. Gold futures from Shanghai dropped 1% after a three-session increase.
Gold futures in India eased from an 8-month high on Tuesday as an improvement in the rupee and an early fall in overseas markets prompted buyers to cash in gains.
Traders in India said they will begin importing gold again over the next week, after the central bank of county cleared up a rule that halt the flow of the precious metal into the number one gold consumer at the end of July.