Gold Prices are Trending Downwards as Fed's backs gradual rate hikes

Federal Reserve Chair Janet Yellen announces that she welcomes the hiking of U.S. interest rates gradually which has pressured gold prices. Spot gold was down by 0.1% to $1,202 per ounce by 0335 GMT, after dropping to as much as $1,197.31. Last Tuesday it has hit eight-week high of $1,218.64. U.S. gold futures had fallen as much as over 1% to $1,197.10.

The U.S. dollar index which measures the greenback against a basket of currencies, were up by 0.3% to 101.200.

Since the U.S. economy is close to full employment and inflation headed toward the Federal Reserve's 2% goal, it "makes sense" for the U.S. central bank to gradually lift interest rates, Fed Chair Janet Yellen said on Wednesday.

Dallas Fed President Robert Kaplan on Wednesday joined the chorus of central bank officials making a case for a gradual hike in U.S. interest rates.

U.S. consumer prices increased in December as households paid more for gasoline and rental accommodation, leading to the largest year-on-year increase in 2-1/2 years and signaling that inflation pressures could be building.

Silver fell by 0.3% to $16.97 an ounce while Platinum fell 0.5% to $956.50, and palladium was down 0.1% to $747.70.

World stocks Slipped to one-month low Ahead of Fed Meeting

Global stock markets closed mostly lower Tuesday September 16, 2014 as investors played it safe in preparation for the Fed Meeting. U.S. central bank may raise interest rates sooner than previously expected

Germany's DAX fell 0.3 percent to 9,620.59 and France's CAC-40 declined 0.5 percent to 4,404.69. Britain's FTSE 100 shed 0.2 percent to 6,791.57. Wall Street appeared set for more losses. Standard & Poor's 500 futures were down 0.1 percent and Dow futures fell 0.2 percent.

The MSCI world equity index .MIWD00000PUS, which tracks shares in 45 countries, was down 0.2 percent after hitting its lowest level since mid-August earlier in the session. In Europe, the benchmark FTSEurofirst 300 .FTEU3 was down 0.4 percent.

Asian shares also slipped. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS shed 0.7 percent to its lowest since late June, while Japan's Nikkei .N225 snapped a five-session winning streak to close down 0.2 percent.

The euro held steady at $1.2937 EUR=, hemmed in a $1.2859-$1.2980 range after a sell-off sparked by the European Central Bank's interest rate cut early this month faded.

The British pound has turned volatile in recent weeks as opinion polls narrowed ahead of Thursday's independence referendum in Scotland, which could spark a sizeable panic in U.K. markets. On Monday, the pound was 0.2 percent lower at $1.6231.

Stocks record-setting levels

Stocks reached more record setting milestones last week, delivering the third consecutive record-high close for the S&P 500 and a new high for the Dow on Friday.

The Dow Jones industrial average closed at 16,947.08, a 25.62-point change and a record. For the week, it was up 1 percent.

The S&P 500 also hit a record, closing at 1,962.87. For the week, it was up 1.4 percent. Energy stocks were among the best performers. It was the S&P 500's 22nd record close this year.

The NASDAQ gained 8.71 points to close at 4,368.04. For the week, it was up 1.3 percent.

Despite the records, it was largely a static day for the indexes. The National Association of Realtors is expected to release existing home sales for May, and on Wednesday the Commerce Department will release numbers for first-quarter gross domestic product and May durable goods orders. Nike is expected to report quarterly results after Thursday’s close.

Dollar Gains vs Yen in Asia

The US dollar soar against Yen to a 5-year high in trading in Asia Thursday because of a strong Japanese share prices. US dollar climb to 104.85 yen in early trade, its highest since October 2008, before settling at 104.71 yen.

On Wednesday, it was 104.39 Yen. Trading in New York is close for Christmas holiday. The Euro stands at $1.3679 and 143.27 yen against $1.3668 and 142.71 yen on Wednesday in Tokyo.

Strong Japanese stock prices were a major market-moving factor. The benchmark Nikkei index ended at a six-year high of 16,174.44, up 1.03 per cent.

Many stock markets globally have been rising as more signs of a US economic recovery emerge.

In other news, China will aim for 7.5% growth in 2014 as exports recover. Their growth will rely on a steady recovery of China's exports next year, they benefited on the stronger demand from developed economies, the commerce ministry said.

Euro Performs, while China Outpace others

The Euro are gaining on both the yen and U.S. dollar on Wednesday, while Shanghai stocks shake off geopolitical concerns to outdo others in the region.

European stocks were poised for a subdued start with financial spreadbetters expecting flat to small gains for Britain's FTSE 100 .FTSE, Germany's DAX .GDAXI and France's CAC 40 .FCHI.

The single currency touched a four-year peak against the yen and a one-month high on the dollar as speculators wrestled with major chart resistance at 138.00 yen and $1.3600. A break here would likely open the way to further gains for euro bulls.

While most share markets were subdued after a flat finish on Wall Street, China's CSI300 .CSI300 of leading Shanghai and Shenzhen A-shares stood out with a 0.9 percent gain.

Investors there seemed unperturbed by the step up in tensions over Beijing's demands that airlines inform them when flying over disputed islands in the East China Sea, a move the White House termed "unnecessarily inflammatory."

The United States responded on Tuesday by flying two unarmed B-52 bombers over the region, while ANA and Japan Airlines (9201.T) stopped sending Chinese authorities their flight plans for routes that pass through the zone.

European markets Trading Floor update

European markets were trading cautiously this morning. The FTSE and DAX opened up 0.2% while the CAC and Euro Stoxx were up by 0.1%.

The FTSE was topped by Kingfisher and Randgold Resources, while Burberry and Vedanta Resources recorded losses. Citigroup reported positive net income figures for the three months to the end of June.

Looking at the foreign exchange market, the euro and Australian dollar appreciated against the US dollar ahead of Bernanke's Testimony taking place on Wednesday. The rates were 0.9177 for AUD/USD and 1.3069 for EUR/USD. GBP/USD, on the other hand, was trading slightly lower at 1.5090 this morning.