Tags: gold | Federal Reserve | stimulus | QE4

Gold Climbs to Six-Week High as Fed Seen Delaying Rate Increase

Friday, 09 Oct 2015 03:46 PM

Gold advanced to a six-week high as minutes of the Federal Reserve’s latest meeting increased speculation that the central bank will hold off raising interest rates until next year. Platinum extended a rally to the longest in more than a year.

While Fed officials noted the U.S. economy continued to improve, they decided to wait for more data confirming the outlook had not deteriorated, minutes released Thursday showed. The odds of a rate increase in 2015 have dropped in the past month and traders and analysts surveyed by Bloomberg are the most bullish on gold in three weeks.

While Fed officials were feeling pretty good about the U.S. economy and Chair Janet Yellen has said the central bank still expects to raise rates this year, patchy U.S. data has helped gold rebound 7.4 percent from a five-year low set in July. Higher borrowing costs curb the appeal of bullion, which doesn’t pay interest or give returns like other assets such as bonds and equities.

“The Fed comments definitely helped to push gold higher,” Ross Norman, chief executive officer of Sharps Pixley, a London- based precious metals dealer, said by phone. “There is a palpable shift in the mood in the gold market, if we lift another $20, we may make significant headway.”

Bullion Prices

Gold for immediate delivery climbed 1.6 percent to $1,157.15 an ounce by 11:03 a.m. in London. Prices earlier reached the highest since Aug. 24 and are up 1.6 percent this week.

Traders put the probability of a rate increase this year at 39 percent, down from 57 percent a month ago, according to Fed fund futures data compiled by Bloomberg. The odds rise to 61 percent for a move in March.

Holdings in gold-backed exchange-traded products declined for a third day. Assets fell 0.5 metric ton to 1,529.1 tons as of Thursday, data compiled by Bloomberg show.

Platinum for immediate delivery rose for a sixth day, climbing as much as 3.4 percent, the most since Dec. 1. It was last up 3.3 percent at $980.03 an ounce, set for a 7.7 percent weekly jump, the most since 2011.

Palladium rose 2 percent to $715.40 an ounce, the highest since June and heading for a fifth weekly gain. Silver added 1.9 percent to $15.9885 an ounce.

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Gold advanced to a six-week high as minutes of the Federal Reserve's latest meeting increased speculation that the central bank will hold off raising interest rates until next year.
gold, Federal Reserve, stimulus, QE4
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2015-46-09
Friday, 09 Oct 2015 03:46 PM
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