Gold was able to rise last week rebounding above a six-week low following minutes from the Federal Reserve’s recent meeting which revealed policymakers concerned about increasing its interest rates much too soon.
Minutes from the Federal Open Market Committee’s recent January meeting expressed concerns that the raising interest rates much sooner could result in a cold drop on the U.S. economic recovery. Policy makers likewise also upset over the effects of the dropping “patient” from the central bank’s interest rate guidance.
Spot gold likewise went up 0.1 % to $1,209.56 an ounce following an earlier fall to a six-week low at $1,197.56 U.S. gold futures for April delivery, which settled down $8.40 or 0.7 % at $1,200.20 per ounce. Platinum prices surged following its recent slide to their lowest in 5 1/2 years.
This should place a short-term bottom in gold which will confirm what some in the market have suspected, that the Fed will be assured to wait for the inflation’s sharp pierce to their operations before finally raising its rates.
Presently, the market is searching for a rate hike before the end of September, although many aired concerns that its more likely that it will commence by September 2016.
The U.S. dollar fell against a basket of major currencies following the release of minutes. With golf coming under immense pressure from expectations that the Fed will be raising interest rates as early as June this year, possibly providing assistance to the dollar and bolstering the opportunity cost of holding non-yielding assets such as the bullion.
Earlier, gold prices extended their previous day’s sharp losses as optimism for a resolution to Greece’s debt talk resulted to the European stocks to consistently remain to a seven-year high.
Prices appreciated technical support at the 61.8 % Fibonacci retracement level from the month-high of January to the November low.
The market remained generally positive that in the end there will be a concurrence between the Eurozone and Greece, therefore they don’t see the same as an extreme tail risk.
Stocks in Europe edged higher to close its multi-year highs as investors brushed off doubt over Greece’s negotiations with its creditors.
Silver was down 0.2 % at $16.46 an ounce with spot platinum rising 0.1 % to $1,172.24 per ounce whereas spot palladium was down 0.3 % at $776.90 an ounce.