Gold price cautiously adds to January gain as Fed update awaited
London (Feb 1) Gold prices inched higher in cautious trading Wednesday ahead of potential clues from the Federal Reserve on the clip on expected interest-rate hikes this year—a scenario that had grown more pessimistic in the early weeks of the year.
“A cautious tone reflecting decidedly uneasy market conditions since the beginning of the year may spur a further downgrade of the expected rate-hike path, extending Tuesday’s moves [for higher gold, a lower dollar and falling Treasury yields] for another day,” said Ilya Spivak, senior currency strategist with Daily FX.
April gold GCJ7, +0.12% inched up $1.50, or 0.1%, to $1,210.10 an ounce and earlier hit $1,212. A finish at this level would be the highest in over a week, according to FactSet data. Prices, tracking the most-active contracts, rose 5.2% in January, which was the strongest monthly performance since June, as the dollar wavered and stocks hit record highs then retreated.
March silver SIH7, +0.24% gained 6 cents, or 0.3%, to $17.60 an ounce. It scored a monthly gain of roughly 9.7%.
Financial markets await the 2 p.m. Eastern time announcement from the Federal Reserve. No interest-rate move is expected this time around but Fed comments could shed light on the likelihood for the pace of higher rates in 2017.
Fed officials had penciled in three rate hikes for this year. The market expects two moves, in June and December.
Early Wednesday, the ICE U.S. Dollar Index DXY, +0.04% , a gauge of the buck against a basket of six currencies, was little moved Tuesday. Moves in the U.S. dollar can influence the attractiveness of dollar-denominated gold to holders of other currencies. And, gold tends to move inversely to Treasury yields, since gold itself offers no yield.
Elsewhere on Comex, March copper HGH7, -0.62% fell 2 cents, or 0.6%, to $2.71 a pound. It was about 8.7% higher for January. April platinum PLJ7, +0.28% tacked on $2.80, or 0.3%, to $999.30 an ounce, while March palladium PAH7, +1.23% rose $7.70, or 1%, to $762 an ounce. Both contracts saw a monthly gain of more than 10%.
In exchange-traded funds, the SPDR Gold Trust GLD, +1.39% was up about 1.4%. The iShares Silver Trust SLV, +2.46% rose 0.3% and the VanEck Vectors Gold Miners ETF GDX, -0.29% fell 0.3%.
Source: MarketWatch
