Gold Price Holds Near $1,710, Awaits Fed, Bernanke

The gold price stabilized near $1,710 per ounce Wednesday morning as investors awaited the outcome of today’s Federal Reserve meeting. Gold prices have come under considerable pressure over the past two weeks amid broad-based weakness in financial markets and a rebound in the U.S. dollar.  On a month-to-date basis, the spot price of gold is now down by 3.8% and on pace to snap a four-month winning streak.

Gold stocks mirrored the stability in gold prices, as the Market Vectors Gold Miners ETF (GDX) oscillated between gains and losses near $50.95 per share.  The GDX has fallen 5.1% in October and is at risk of posting its first losing month since May.

On Wednesday, the majority of large-cap gold stocks posted modest advances.  Barrick Gold (ABX) rose by 0.1% to $38.93 per share, IAMGOLD (IAG) by 0.5% to $15.40, and Kinross Gold (KGC) by 0.8% to $9.96 per share.

Silver held steady alongside the gold price this morning, inching up by $0.07, or 0.2%, to $31.77 per ounce.  However, gold’s sister precious metal has experienced a challenging period of late as well, dropping 8.0% thus far in October.  Furthermore, silver is also on track to post its first losing month since May.

As for the Federal Reserve, while last month’s Federal Open Market Committee (FOMC) meeting marked the start of the open-ended third round of quantitative easing (QE3), today’s session is expected to contain far less significant announcements.  Instead, most market strategists are anticipating that Chairman Ben Bernanke and his fellow central bankers will focus more on their forecasts for the U.S. economy given that QE3 is only in its early stages.

With the Fed unlikely to launch any additional accommodative monetary policy measures at today’s meeting, gold prices could remain under “modest” pressure in the near term – according to analysts at HSBC.