Precious metals prices moved away from recent lows in trading on Thursday morning after last night’s Fed minutes failed to provide a clearer picture on when the normalisation of US monetary policy might begin.
Spot gold was last up $4.60 on Wednesday’s close at $1,162.00/1,162.80 per ounce, having traded within an intraday range of $10 so far – it came close to its lowest price this year on Wednesday at $1,147.20.
In the June FOMC meeting minutes, officials were clearly concerned with the situation in Greece and growth concerns in China but also said that they need more evidence of a strengthening US economy before raising rates.
“The contents of the Fed minutes from the June FOMC meeting are moderately supportive for gold,” HSBC said in a note. “Gold has tended to react positively to any perceived delay in rates, especially if any delay also weighs on the dollar.”
Still, the US currency was last 0.4 percent stronger against the euro at 1.1036 though European equity markets have opened higher this morning.
Many market participants will move to the sidelines to reduce their exposure to any Greece-related volatility. European leaders have set a Sunday deadline for Greece to reach an agreement after an emergency summit meeting on Tuesday ended without a resolution.
Greece is scheduled to make a payment of 3.5 billion euros on July 20 to the European Central Bank.
“We suspect that trading conditions will likely wind down heading into the balance of the week, as money moves to the sidelines ahead of a Sunday deadline the Greeks are facing to present serious reforms to the troika. Barring a breakthrough, the odds are high that the Greek banks would be nationalized or merged no later than July 20,” INTL FCStone’s Ed Meir said.
In China, the sell-off in Chinese equities paused – the SCI closed up more than six percent – although rotation of funds may see some push into the gold market.
In the other metals, silver is bouncing back, climbing 28 cents or nearly two percent to $15.33/15.38 per ounce. It had neared six-year lows earlier this week.
Platinum moved off the February 2009 low of $1,010 and was last $4.50 higher at $1,030/1,035 per ounce. Palladium was down $2 at $649/654, having recently hit a June 2013 low of $630.
Of some concern for palladium investors is contraction in the Chinese auto market in June for the first time since February 2013, the China Passenger Car Association said. Last month, car sales fell 3.2 percent year-on-year to 1.43 million units.
(Editing by Mark Shaw)
The post Gold price off recent low, FOMC statement sheds no light on rate rises appeared first on The Bullion Desk.
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