Gold Price Ends Firmer But Shows Little Reaction To FOMC Statement

San Francisco (July 27)  Gold prices were ending the US day session modestly higher Wednesday.  Some short covering in the futures market and bargain hunting in the cash market were featured. The afternoon FOMC statement that showed no change in U.S. interest rates did not move markets much, including the precious metals. August Comex gold was last up $4.50 an ounce at $1,325.40. September Comex silver was last up $0.352 at $20.03 an ounce.

The FOMC statement also said U.S. interest rates will rise only slowly over time but did say the U.S. economy is on the upswing.

Earlier today, gold prices received a slight boost when a much-weaker-than-expected U.S. durable goods orders report was released. Durables orders were down 4.0% in June for the largest decline in two years. A drop of 1.4% was expected.

World stock markets were mostly higher Wednesday and U.S. stock indexes were mixed in afternoon New York trading. There continues to be a general “risk-on” attitude among traders and investors, which has boosted world stock markets to record or multi-year highs recently.

The major events in the marketplace this week are central bank meetings in the U.S. and Japan. With the FOMC meeting just concluded, attention turns to the Bank of Japan meeting Thursday and Friday. It is expected the BOJ will announce some sort of a new monetary policy stimulus package. A Japanese newspaper reported Tuesday that any announced BOJ stimulus package will not be an aggressive one. Another Japanese newspaper report Wednesday said upcoming monetary policy stimulus will indeed be robust.

The key “outside markets” on Wednesday saw the U.S. dollar index firmer and Nymex crude oil prices weaker. Nymex crude oil futures are hovering just below $42.00 a barrel and hit a three-month low today. There are concerns about a world oil supply glut weighing down oil prices for quite some time to come.

Source: KitcoNews