Gold ascended to the highest point in over a month as prices extended yesterday’s rally stemming from a perceived dovish Federal Reserve statement.
Gold for December delivery on the Comex division of the New York Mercantile Exchange was last up $13.40 or 1.2 percent at $1,141.20 per ounce. Earlier, the price touched $1,143.60, the highest price for the most active contract since July 17.
The past two trading sessions have seen the yellow-metal jump over $25 as investors interpreted the Federal Open Market Committee (FOMC) July meeting minutes as quite dovish after weeks of hawkish speeches and statements from various board members.
Federal Reserve Chairwoman Janet Yellen has expressed a desire to raise interest rates this calendar year after rates have been at near zero levels since December 2008.
“Futures markets are now pricing a 38 percent to 45 percent probability of a Fed move in September, still not an odds-on bet,” Edward Meir, an analyst at INTL FCStone, said. “Adding to the uncertainty, Chairman Yellen will not be attending the central bank’s annual retreat in Jackson Hole, Wyoming, later this month, usually a relaxed gathering where officials leave clues about upcoming policy decisions.”
Meir did add that he sees a rate rise next month because the July meeting did not have access to new data released in the past few weeks.
After gold fell to multi-year lows at the beginning of the month, prices were due to recover as the dollar has shed most of its gains and likelihood of a September rate rise diminished.
The dollar was last 0.3 percent weaker at 1.1157 against the euro, down from August’s high of $1.0882 achieved on August 4.
“In line with our expectations, a short-covering rally occurred sooner rather than later,” FastMarkets analyst Boris Mikanikrezai said. “In the near-term, we expect that gold prices will continue to push higher, driven essentially by further short-covering.”
Turning to eurozone data, German PPI month-over-month in July was unchanged, above the consensus of a 0.1 percent dip.
In a heavy US data day, weekly unemployment claims were at 277,000, near the forecast of 272,000 and holding below the psychological 300,000 mark.
Scheduled for release later today is the Philly Fed Manufacturing Index, existing home sales, CB leading index and natural gas storage figures.
Meanwhile in wider markets, Germany’s DAX and France’s CAC-40 were down 0.5 percent and 0.9 percent respectively.
As for the other precious metals, Comex silver for September delivery was last up 29.1 cents at $15.470 per ounce. Trade has ranged from $15.225 to $15.550.
Platinum for October delivery on the Nymex rose $5.10 to $1,018.20 per ounce, while the most-actively traded palladium contract was at $614.75 per ounce, up $5.0.
(Editing by Tom Jennemann)
The post Gold climbs to 1-mth high, extends rally on dovish FOMC minutes appeared first on The Bullion Desk.
No comments:
Post a Comment