Gold Ends Near Steady; FOMC Statement a Non-Event for Markets
New York (June 18) Gold prices ended the U.S. day session near unchanged Wednesday. The much-anticipated FOMC statement contained pretty much what traders and investors expected and had little impact on market prices. Traders were awaiting Fed Chair Janet Yellen’s press conference as of this writing Wednesday afternoon. August Comex gold was last up $1.70 at $1,274.00 an ounce. Spot gold was last quoted up $2.10 at $1,274.25. July Comex silver last traded up $0.068 at $19.80 an ounce.
Most market watchers expected the FOMC to announce it will continue to taper its monthly bond-buying program, also called quantitative easing, by another $10 billion. Markets took the statement in stride and are now looking to Yellen’s comments at her press conference, which will be parsed for clues on future action coming from the FOMC.
The civil war in Iraq remains a major market factor at mid-week and is prompting some keener risk aversion among many traders and investors. Reports Wednesday said violence in Iraq is still flaring and that the ISIS rebels have taken partial control over Iraq’s largest oil refinery. Crude oil prices are at multi-month highs on worries about Iraqi crude oil exports being reduced, and on concerns the violence in Iraq could spread to other Arab nations.
The Russia-Ukraine tensions are still running high this week as Russia has recently cut the natural gas supply to Ukraine and said it will supply natural gas to Ukraine only if paid for in advance.
The above geopolitical flashpoints will continue to be very closely monitored for new developments. Both situations are likely to worsen before they become better. The gold market, crude oil, U.S. Treasuries and the U.S. dollar should all at least see limited selling interest as these two developments play out.
In other news, the latest German government auction of its 10-year bond fetched a yield of 1.39%, which is the lowest rate in over a year. Demand for the German bund was termed weak, however.
The World Gold Council said it will meet in July to discuss revamping the London gold fix, which has been closely watched for over a century.
The London P.M. gold fix was $1,269.75 versus the previous A.M. fixing of $1,269.00.