first majestic silver

Gold edges up from 7-week low after FOMC minutes

February 18, 2015

New York (Fevb 18)  Gold futures settled at their lowest level in nearly seven weeks on Wednesday, then clawed their way back up in the immediate wake of minutes from the Federal Reserve’s January meeting.

With Chinese buyers out for the Lunar New Year holiday, prices suffered a second straight session loss, but minutes from the Federal Reserve’s latest policy meeting showed that officials were in no rush to hike interest rates, fueling a recovery for gold prices in electronic trading.

Gold for April delivery  settled at $1,200.20 an ounce on Comex, down $8.40, or 0.7%, on Wednesday — their lowest settlement since Jan. 2, based on the most-active contracts.

But in electronic trading on Globex Wednesday afternoon, prices edged back up to $1,210.50 shortly after the Fed minutes were released.

Low interest rates can pressure the dollar and lead to inflation. Gold is often seen as a hedge against inflation and a weaker dollar can lure buyers to the gold market.

“I don’t think the Fed is going to be in any hurry to raise rates for a long, long time. As such, I think sentiment surrounding gold in the intermediate term should be positive,” said Adam Koos, president of Libertas Wealth Management.

But Yves Lamoureux, president of Lamoureux & Co., a market advisory firm based on behavioral economics, doesn’t expect any near-term gains in gold to last.

Lamoureux believes that gold is “still deflating from a bubble” last seen a the top of the $1,900 level, so he’s bearish on the metal short term, and “very bullish” long term.

Rounding out action on Comex during the regular trading session, March silver  was settled at $16.265 an ounce, down 11 cents, or 0.7% and March copper  tacked on 33 cents, or 1.3%, to $2.615 a pound.

April platinum  fell $9.80, or 0.8%, to end at $1,167.20 an ounce and March palladium  gave back $6.65, or 0.9%, to $776.60 an ounce.

Source: MSNmoney

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