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Gold hits over 1-wk top as Fed keeps rates steady

  • SOURCE: | qwesa2big
  • 1.8838576Gold hit a more than one-week high on Thursday as the dollar weakened after the U.S. Federal Reserve kept interest rates unchanged at its first meeting since President Donald Trump took office.

    Spot gold was up 0.6 percent at $1,216 per ounce as of 0601 GMT after rising to a high of $1,217.17, its highest since Jan. 24, while U.S. gold futures were 0.8 percent higher at $1,218.10.

    The dollar index edged lower 0.2 percent to 99.468.

    The Fed kept interest rates unchanged on Wednesday, but painted a relatively upbeat picture of the U.S. economy that suggested it was on track to tighten monetary policy this year.

    “The sharp rebound after a pull down below $1,200 and the Asian pricing model, despite the Chinese New Year, seem favourable and we see a lot of bullish signals,” said Spencer Campbell, general manager with Kaloti Precious Metals, Singapore.

    “We are sort of eyeing the $1,225 levels in the next move if the metal breaks the recent highs of around $1,215.”

    Spot gold may retest a resistance at $1,219 per ounce as it has found a support at $1,197, according to Reuters technical analyst Wang Tao.

    Gold is slightly being bid in the short term as the dollar’s weakness continues, said Nicholas Frappell, general manager with ABC Bullion, adding non-commercial longs speculating on the dollar index had been trimming their positions since the start of 2016 and the Fed appeared to remain dovish.

    “Additionally, there are signs that ETF holders are adding again, and that after some reduction in length on the CME, buyers may be returning,” said Frappell.

    Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund (ETF), rose 1.34 percent to 809.74 tonnes on Wednesday from 799.07 tonnes on Tuesday.

    Speculators slightly lowered their net long position in COMEX gold contracts in the week to Jan. 24, U.S. Commodity Futures Trading Commission (CFTC) data showed.

    The yellow metal gained more than 5 percent in January, its best since June 2016, as the dollar suffered its worst start to the year in three decades.

    Meanwhile, investors also turned their attention to a quarterly report from the Bank of England on Thursday. The BoE was expected to avoid adding to speculation about a first interest rate hike in nearly a decade, even as it acknowledges the resilience of Britain’s economy since last year’s Brexit vote shock.

    In other precious metals, spot silver rose 0.5 percent to $17.60 per ounce, while platinum was up 0.4 percent at $1,000.35. Platinum earlier touched $1,005.70, its highest since Nov. 9, 2016.

    Palladium rose 0.8 percent to $768.50 per ounce.


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