The December contract ended Thursday’s session 0.62% higher at $1,357.20 an ounce.
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Fed minutes released Wednesday showed policy makers won’t commit to increasing rates until they reach a consensus about the outlook for the US economy.
In conclusion, even if the Federal Reserve bankers raise interest rates again at some point in the future, as the title of my article states, we have traveled well beyond the point of no return for a long time now regarding interest rate policy solutions, and any knee-jerk reactions of immediate falling gold and silver prices in response to more hollow “hawkish” Federal Reserve minutes or even too-little, too-late, actual small interest-rate increases should be completely disregarded, with all eyes kept firmly on the big picture of the inevitable continuing fiat currency purchasing power destruction.
San Francisco Fed President John Williams on Thursday joined a growing chorus of his colleagues signalling support for a U.S.
“Gold prices could drop back in the short term if the Fed resumes its rate hikes sooner than the markets now anticipate”, said Capital Economics. Reports showed the number of Americans filing for unemployment benefit fell more than expected last week, while manufacturing activity in the U.S. Mid-Atlantic region saw a mild improvement this month.
“There is no clear direction from the Fed”.
Higher interest rates also typically put pressure on non-interest bearing assets such as gold, as there’s an opportunity cost associated with owning gold because investors sacrifice whatever interest they could be earning on the funds they have invested into the precious metals.
The possibility of a September rate increase is much lower at 18%.
Signals are neutral for spot gold as it is stuck in a range of $1,337.22-$1,358.01 per ounce, Reuters technical analyst Wang Tao said.
“Looking beyond the paper gold and focussing on the physical market, which often determines longer-term price trends, we note that off take has been somewhat patchy”, said Bank of America Merrill Lynch in a note. The dollar against a basket of six major currencies was up about 0.31 percent at 94.447. So any suggestion of an interest-rate increase makes USA dollar investments more attractive to worldwide investors, leading to an increase in the value of the of the greenback vs. other currencies across the globe. “Overall the market is in wait-and-see mode ahead of next week Thursday’s meeting”.
The yellow metal is trading at its highest level in two weeks, as the market continues to hover in a well established range that is keeping prices within a narrow range.
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Silver climbed 0.6 percent, platinum rose 0.9 percent and palladium added 0.9 percent.
