LONDON – Gold rebounded yesterday as investors anticipated signals on the direction of US monetary policy from the minutes of a November Federal Reserve meeting. Spot gold was up 0,1 percent at $1 277 per ounce, as of 1244 GMT. The metal fell about 1,4 percent on Monday in its biggest one-day percentage drop since September 11. US gold futures for December delivery gained 0,2 percent to $1 277,30.

“The Fed rate hike in December is roughly priced in and unless there are very hawkish minutes, its more that people are looking for direction about future moves,” said Georgette Boelle, a commodity strategist at ABN AMRO.

The minutes are due tomorrow. Gold was also profiting from a political crisis in Germany,Europe’s largest economy, boosting bullion’s safe-haven appeal.

German Chancellor Angela Merkel said she would prefer a new election to leading a minority government after talks on forming a three-way coalition failed.

Traders were also keeping an eye on safe-haven demand for gold after US President Donald Trump put North Korea back on a list of state sponsors of terrorism on Monday.

BMI Research lowered its gold price forecast slightly to $1 300 per ounce in 2018 and $1 325 per ounce in 2019.

“(This is) driven by our view that the US Fed will hike rates by more than is reflected in the market,” the researcher said in a note, adding inflation and geopolitical risks in 2018 would keep gold prices supported. – Reuters.

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