Gold gains on lower dollar after Fed remains cautious on rates

GMT 22:49 2016 Friday ,08 April

Arab Today, arab today Gold gains on lower dollar after Fed remains cautious on rates

Gold jumped almost two percent on Thursday
London - Arab Today

Gold jumped almost two percent on Thursday as the dollar remained under pressure on uncertainty around future US interest rates increases, while global shares fell, rekindling investor appetite for safer assets.
Minutes from the US Federal Reserve’s March meeting showed policymakers debated whether an interest rate hike would be needed in April, but a consensus emerged that risks from a global economic slowdown warranted a cautious approach.
They signalled that they expected to raise rates twice in 2016 but the timing still appears unclear.
Spot gold benefited from a 17-month low in the dollar versus the Japanese yen. Prices hit a two-week high of $1,243.45 an ounce and were up 1.7 percent at $1,242.60 by 1354 GMT.
The metal saw its biggest quarterly rise in nearly 30 years in the three months to March, rallying more than 16 percent and hitting a 13-month high on speculation the Fed was not in a hurry to normalize interest rates.
It had however drifted back toward the key $1,200 level in the past week after hawkish comments from several Fed officials.
“The Fed’s minutes yesterday and the dollar’s weakness have created an environment that gives gold an additional push and attract some pent-up demand,” Saxo Bank senior manager Ole Hansen said.
“The most immediate resistance is $1,244 but a break above $1,255 could suggest a new high in the market.”
The Fed should be patient and cautious about raising short-term interest rates, but should nevertheless increase them in a sustained way, Dallas Fed President Robert Kaplan said on Wednesday.
European and US shares fell on Thursday on uncertainty over global growth.
“The share markets are in the red and that is helping gold’s ascent today... a run toward $1,250 is possible,” MKS SA head of trading Afshin Nabavi said.
Assets in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.51 percent to 819.60 tons on Wednesday, the first inflow in nearly two weeks.
Silver gained 1.6 percent to $15.28, platinum rose 2 percent to $958.94 and palladium was down 1.1 percent at $533.70.
Source: Arab News

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