Gold & silver climb after Fed minutes

gold_silver_bars_largeGold jumped in the morning session adding $15.90 after the FOMC indicated that is was not hurrying to raise interest rates destroying investors’ hopes. Gold moved up to 1216.10. Yesterday gold was flat as confusion over Greece’s debt negotiations with its European lenders dominated markets. Financial markets had been under pressure as euro zone finance ministers were unable to agree with Greece a final statement or a way to continue talks until their next meeting on Monday to extend an international bailout. Gold’s sell-off for much of this week, despite the Greek debt crisis, suggests that markets are either expecting an ultimately positive result, or they may be discounting the country’s possible exit as a net positive.

An interest rates hike by the U.S. central bank, which has kept rates near zero since 2008 to stimulate the U.S. economy, could further strengthen the dollar and in turn hurt demand for bullion, a non-interest-bearing asset. India is likely to remain the world’s biggest gold consumer this year after regaining the top spot from China in 2014, driven by robust jewelry demand, the World Gold Council (WGC) said. Indian consumer demand for gold jewellery and investment totaled 842.7 tonnes last year, compared with 813.6 tonnes by China, according to WGC data. Demand dipped in both countries in 2014 from record levels a year earlier, but Indian demand slid only 14 percent, compared with a much steeper 38 percent fall in China. The two countries accounted for over half of global demand.

Global gold demand also hit a five-year low last year as buying of jewellery, coins and bars failed to keep pace with 2013′s elevated levels, the WGC said

Silver jumped 390 points to 16.655 taking cues from gold in the Asian session after range trading on Wednesday. Silver prices remained in the range as European leaders failed to agree on Greece’s bailout program after talks in Brussels. Prices rose earlier after more stimulus from the Swedish central bank. The Riksbank lowered its repo rate to minus 0.10 percent from zero and said it will also make policy “more expansionary” by soon buying 10 billion kronor ($1.2 billion) in government bonds with maturities of one to five years. Core retail sales, which exclude automobile sales, slumped by 0.9% in December, disappointing forecasts for a 0.4% decline. Platinum marched to the same band but saw a bit less momentum than gold to trade at 1182.20. – FX Empire

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