Forgot your password?



Back to login

Gold climbs to 5-week high as Fed hike hopes fizzle
August 20, 2015, 10:05 am
Share/Bookmark

Gold rose to its highest in nearly five weeks on Thursday after minutes from the Federal Reserve's policy meeting last month signalled that a hike in U.S. interest rates in September may be unlikely.

Fed officials worried that lagging U.S. inflation and a weak global economy posed too big a risk to commit to a "lift off" on rates, buoying gold that had been out of favour amid an imminent tightening in U.S. monetary policy.

"Given that the possibility for a hike in September has diminished, I would think there is a higher probability for a December rate hike. And that does give a near-term support to gold prices," said Barnabas Gan, analyst at OCBC Bank in Singapore.

Spot gold touched $1,135.20 an ounce, its loftiest since July 17, and was flat at $1,134 by 0232 GMT.

U.S. gold for December delivery rose half a percent to $1,133.80 an ounce.
Spot gold has now recovered more than 5 percent from a 5-1/2-year low of $1,077 reached in a late July rout.

The precious metal is on track for a second weekly gain after ending its longest retreat since 1999, having benefited last week from uncertainty posed by China's surprise devaluation of its currency.

A potential delay in a rate increase to December offers upside potential for non-interest bearing gold, with OCBC's Gan seeing initial resistance at $1,150, a level last seen in May.

Many analysts had been betting on a rate hike when Fed officials next meet in September given sustained strength in the world's largest economy. But some thought policymakers might take a gradual approach in lifting rates after China's yuan devaluation.

MKS Group trader Samuel Laughlin said gold closing above $1,132 on Wednesday was "technically bullish" for the metal, adding "we may see a move towards $1,145-$1,150 in the short term."

Amid the bullish tone for gold, spot platinum matched Wednesday's five-week high of $1,014 an ounce and was last up 0.2 percent at $1,013.50. Palladium slipped 0.2 percent to $609.20 per ounce and silver was steady at $15.31.

Source: Gulf News
 

Share your views
CAPTCHA
 

"It is hard to fail, but it is worse never to have tried to succeed."

"Envy comes from wanting something that isn't yours. But grief comes from losing something you've already had."

Photo Gallery