Rising interest rates reduce gold’s allure because the metal generally offers investors returns only through price gains. The Fed said in September it planned to end asset purchases this month if the economy keeps improving. Volumes for the Shanghai Gold Exchange’s benchmark bullion spot contract rose to a three-week high today, and the U.S. Mint has sold the most ounces of American Eagle gold coins since January.
Gold traded little changed above a two-week low in London before the Federal Reserve ends a policy meeting and amid signs of improving physical demand.
Gold for immediate delivery added 0.1 percent to $1,229.21 an ounce by 8:59 a.m. in London. It reached $1,222.62 yesterday, the lowest since Oct. 15, before settling higher. Gold for December delivery was little changed at $1,228.80 on the Comex in New York.
Futures trading volume was 57 percent below the average for the past 100 days for this time of day.
Holdings in gold-backed exchange-traded products fell 1.8 metric tons to 1,652.1 tons yesterday, remaining at a five-year low. Russia and Kazakhstan were among nations that added bullion to their reserves in September as Mexico cut holdings, data on the International Monetary Fund website showed.
The U.S. Mint sold 59,500 ounces of American Eagle gold coins so far this month, its website showed. In China, the biggest buyer, imports of the metal from Hong Kong rose to a five-month high in September, data showed this week.
Silver for immediate delivery added 0.1 percent to $17.2285 an ounce in London. Platinum rose 0.4 percent to $1,271.25 an ounce. Palladium climbed 0.6 percent to $797.89 an ounce. It’s up for a fifth day in the longest run of gains since Aug. 15.