Gold prices surged to the highest price in nearly three weeks after perceived dovish stance from Federal Reserve chairwomen Janet Yellen raised questions on whether the US central bank will delay a rate hike till 2016.
Spot gold was last at $1,200.10/$1,200.90 per ounce, up $15.60 on Wednesday’s close and highest price for the yellow-metal since June 1. Silver rose $0.13 at $16.17/$16.22 per ounce.
The Federal Open Market Committee (FOMC) concluded their two-day meeting yesterday and revised 2015 GDP to two percent from 2.3 percent. Yellen said that the economy is improving from the first quarter, but provided no timeline on the normalisation of rates and suggested that the increase in interest rates would be undertaken gradually.
“In her press conference, Yellen added that said she was encouraged by signs that wage growth is picking up, but these were ‘not yet definitive’, another sign that the Fed remains unsure about when to raise rates, although the operating start date by most analysts is still squarely on September,” Edward Meir, analyst at INTL FCStone, said.
The members of the Fed’s policy board are locked in a debate on when will be the right time to raise rates, which have been near zero since December 2008. Since its decision is now entirely dependent on US data, a rate increase could happen at any future meeting.
In data today, CPI in May was up 0.4 percent, below the forecast 0.5 percent and core CPI at 0.1 percent missing the expected 0.2 percent, while the dollar was 0.7 percent weaker at $1.1418 against the euro.
Platinum was last up $3.00 to $1,078.0/$1,083.0, while palladium was unchanged at $717.0/722.0.
(Editing by Tom Jennemann)
The post Gold above $1,200/oz after FOMC statement appeared first on The Bullion Desk.
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