Tags: Trump Administration | donald trump | fed | gold | bulls

Gold Bulls Emboldened as Fed Grapples With Trump Uncertainty

Gold Bulls Emboldened as Fed Grapples With Trump Uncertainty

(Getty/Frank Rumpenhorst)

Thursday, 02 February 2017 12:24 PM

The Federal Reserve has emboldened gold bulls.

Prices and trading volumes surged Thursday on call options giving holders the right to buy bullion at higher prices. On Wednesday, investors poured $413 million into SPDR Gold Shares, the largest ETF backed by the metal, recouping almost half of the money that exited last month.

The Fed, which kept interest rates steady this week after a two-day meeting, gave little clue on when it might next tighten monetary policy as officials grapple with the uncertainty created by a new presidential administration. Policy makers in December telegraphed three rate hikes for 2017. Gold prices have rebounded about 6 percent this year, helped by a weaker dollar and demand for the metal as a haven, after posting the worst quarterly loss since 2013.

“There is no imminent concern of a Fed rate hike, and that gleams the green light on for the metals to move higher,” David Meger, a director of metals trading at High Ridge Futures in Chicago, said in a telephone interview. “The weakening dollar and the lack of concern of a Fed interest-rate hike, and slightly higher inflationary numbers in the market, all support the precious metals.”

Gold futures for April delivery advanced 1.1 percent to $1,221.80 an ounce at 10:53 a.m. on the Comex in New York, after touching $1,227.50, the highest for a most-active contract since Nov. 17.

Call options giving holders the right to buy March futures at $1,250 an ounce jumped 84 percent Thursday, the biggest increase since the contract began trading in June 2015. That was the most-active gold option, with volume surging more than six fold this week. The eight most-traded options on Thursday were calls, with prices rising at least 34 percent for each.

 

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The Federal Reserve has emboldened gold bulls.Prices and trading volumes surged Thursday on call options giving holders the right to buy bullion at higher prices.
donald trump, fed, gold, bulls
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2017-24-02
Thursday, 02 February 2017 12:24 PM
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