The Fed should avoid removing support for the U.S. economy too quickly, board governor Lael Brainard said on Monday in comments that solidified the view the central bank would leave rates unchanged next week.
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SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 1.12 per cent to 939.94 tonnes on Friday.
“While we’re above the $124 mark here in the GLD, I think it’s a buy and we could move out of the range in the gold market”, added Gordon.
Spot gold was up about 0.3% at $1,330.41/oz by 3.35am GMT.
The change in market sentiment followed Boston Fed President Eric Rosengren’s hawkish comments on Friday, when the chances of a rate rise in September were seen at 30 per cent, up from 24 per cent before his comments.
Brainard, a voting member of the Federal Open Market Committee (FOMC), was the last scheduled Fed speaker before next week’s meeting, and some market participants had speculated that her speech could be used as an opportunity to prepare markets for an interest rate increase. Against the yen, the dollar slid to ¥101.72 from Monday’s high of ¥102.82. This worldwide rebound was the result of dovish statements made by Federal Reserve Governor Lael Brainard.
Today (13/09), however, Asian stocks (Japan, Hong Kong and South Korea) and currencies rebounded sharply, following the rebound that occurred on Wall Street overnight.
Spot gold may end its current bounce around resistance at $1,330 per ounce, and then resume its downtrend, according to Reuters technical analyst Wang Tao. It touched its lowest in more than two months at $1,033.45 on Monday.
Palladium rose 0.8% to $665.80.
Speculation about an interest rate hike is making the rounds, but one trader isn’t believing the hype – and that has him making a bet on gold.
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Palladium was down 1.7 per cent at US$663.22, having tapped US$650.15, the lowest since July 20.
