Gold Price Holds Gains After Fed Minutes Showed Inflation Isn’t Worry
London (Aug 18) Gold held onto gains from the past three days as the dollar retreated after traders read the minutes from July’s Federal Reserve meeting as showing U.S. interest rates will stay low.
Bullion for immediate delivery was little changed at $1,347.96 an ounce by 9:57 a.m. in London, according to Bloomberg generic pricing. It’s up 27 percent this year partly on weak or negative world interest rates, which help gold because the metal doesn’t offer a yield.
The dollar retreated against all major peers bar the Brazilian real as the Federal Open Market Committee minutes showed a growing consensus that inflation risks are low.
“Gold received another boost from the dollar weakness that followed the FOMC minutes yesterday,” Ole Hansen, head of commodity strategy at Saxo Bank A/S, said by e-mail. “However, the gold rally is looking increasingly tired with the market in need of a deeper correction.”
For a QuickTake on gold’s price performance, click here.
Odds of an increase in borrowing costs in December fell to 49 percent from 51 percent a day earlier, according to futures prices compiled by Bloomberg. Some policy makers have previously suggested at least one rate increase this year, with New York Fed President William Dudley indicating a move could come as soon as the Fed’s Sept. 20-21 gathering.
Miners advanced, with the FTSE/JSE Africa Gold Mining Index gaining 1.9 percent, and Gold Fields Ltd. and Sibanye Gold Ltd. climbing at least 2 percent. Top platinum producer Anglo American Platinum Ltd gained 0.7 percent, with the recovering price of the metal supportive, according to Bloomberg Intelligence analyst Eily Ong.
In ETFs and other metals:
•Holdings in bullion-backed exchange traded funds fell 4 metric tons to 2,028.9 tons on Wednesday, data compiled by Bloomberg show.
•Silver held at $19.69 an ounce.
•Platinum was up 0.5 percent at $1,123.95 an ounce, its third consecutive gain.
•Palladium added 0.9 percent to $700.88 an
ounce.
Source: Bloomberg
