Metals: Gold Buoyed After Fed Minutes Further Weaken Dollar
13 October 2017 - 3:23AM
Dow Jones News
By David Hodari and Stephanie Yang
Gold prices climbed Thursday after minutes from the Federal
Reserve's last meeting, released Wednesday, suggested divided
opinions on whether to raise interest rates again this year.
Futures for December delivery rose 0.5% to $1,295.20 a troy
ounce on the Comex division of the New York Mercantile
Exchange.
Copper prices also gained, rising 1.1% to $3.1305 a pound in New
York.
The minutes from the most recent Federal Open Market Committee
meeting showed concern among officials about low inflation, and
doubts on whether the central bank should keep raising rates this
year.
"The Fed seems perplexed on the stubborn, below-target,
inflation numbers, and the minutes showed a growing divide between
the voting members on when and how aggressively the Fed should
tighten," said Peter Hug, global trading director at Kitco
Metals.
Gold prices have been pressured this year by strong economic
data and higher interest rates. The precious metal pays its holders
nothing and struggles to compete with yield-bearing assets when
borrowing costs rise.
Data from CME Group showed that 86.7% of traders are betting
that the Fed will raise interest rates by December.
"Those dovish Fed minutes are having the dual impact of one,
weakening the dollar, and two, underpinning gold," said William
Adams, analyst at Fastmarkets.com.
The persistence of geopolitical risk was also driving investors
to the gold safe haven. "There are reports out of Russia that North
Korea is testing long-range missiles, which can reach the U.S.
mainland," Mr. Adams said.
Investors were looking ahead for further news from the
International Monetary Fund central bankers' conference.
Traders were also looking out for further comments from FOMC
members, U.S. producer-price index data, and Chinese monetary
supply numbers, all due out by the end of the week.
Write to David Hodari at David.Hodari@dowjones.com and Stephanie
Yang at stephanie.yang@wsj.com
(END) Dow Jones Newswires
October 12, 2017 12:08 ET (16:08 GMT)
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