GOLD BULLION prices held steady above $1270 per ounce Wednesday morning in London as European crude oil prices held near 9-month highs and Western stock markets ticked higher.

 

The Iraqi army said it pushed back ISIS militants from Baiji, the country's largest oil refinery, some 130 miles north of Baghdad.

 

Ukraine's new president, Petro Poroshenko, was set to offer a unilateral ceasefire according to Kiev, so that pro-Russian separatists can lay down their arms.

 

"Gold had a modest bounce this month, which I think has run its course," reckons $20 billion fund manager Michael Shaoul at Marketfield Asset Management in New York, quoted by Bloomberg.

 

Gold's 6-month correlation with oil prices, says the newswire, has "turned negative" for the first time since mid-2009.

 

"The long-term chart for oil tells me that the price wants to go higher," says Shaoul.

 

Trading half-a-per-cent down from last week's finish in Dollars, the price of gold bullion was less firm Wednesday against the Euro and Sterling, as the US currency slipped ahead of today's Federal Reserve decision on zero interest rates and QE money creation.

 

The Fed is widely expected to announce another $10 billion of QE tapering, down to $35bn per month.

 

Ten-year US Treasury yields edged lower as prices rose ahead of the Fed decision, offering 2.64% annual income to new buyers.

 

UK gilt yields meantime fell hard after minutes from the Bank of England's latest meeting showed policymakers were unanimous in voting for no change to record-low 0.5% interest rates.

 

Silver prices tracked gold bullion, also rallying quickly from Tuesday's 0.7% spike lower and rising back to $19.75 per ounce – slightly up on last week's finish.

 

Market-development organization the World Gold Council meantime announced a meeting for 7 July to discuss "reform" and "modernisation" of the London Gold Fix, the century-old dealing point taken as the global daily price benchmark.

 

With UK and German regulators expressing interest in how the Fix is achieved, "Any reform or replacement of the Fix," the Council said – inviting central banks, miners, refiners and regulators to attend – "must serve the needs of all market participants and meet today's requirements for transparency, liquidity and independent oversight."

 

Trade group the London Bullion Market Association – holding a members' seminar Friday to review proposals for the Silver Fix process, due to end in its current format after 117 years in August – said "the WGC's perspective from its gold mining members and the ETF investment community ensures an important dimension to the on-going benchmark discussion."