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1/27/2016, 2:35 PM (Source: TeleTrader)
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Path to Fed’s decision paved with gold

The price of gold rose on Tuesday to the levels last seen 12 weeks ago, with a high of $1,121.80 per fine ounce. In Wednesday’s trade, the precious metal held the 0.10% lower spot price of $1,118.56 per fine ounce at 2:46 p.m. CET.

The prices in this range were last recorded back in the beginning of November, when the markets in the United States have expected a hike of the main interest rates.

The U.S. Federal Reserve finally decided to increase the basic interest rate from 0.00-0.25% to 0.25-0.50% in the middle of December. The change came after seven years of virtually zero interest rate on the federal funds.

The Fed Chairwoman Janet Yellen described the motives for decision in her speech. The idea with the ultra-low rates was "to support the recovery of the economy from the worst financial crisis and recession since the Great Depression," said Ms Yellen in December.

Six weeks on, the markets have lowered their expectations of another rate hike, but will carefully listen to remarks on the macroeconomic picture. The Chinese economic slowdown would give a reason for Fed to approve another hike.

Global markets have endured wave of losses since the beginning of the year, and the gold might be a good opportunity for investors to keep away from the trade frenzy through a short investment in gold. That would provide investors with time to save their dollars’ value.

Platinum is another precious metal that gained value, with spot price of $876.72 per ounce art 2:12 p.m. CET. Palladium added 0.49% to trade at $494.50 per ounce, and silver gained 0.39% to $14.52 per ounce at 2:30 p.m. CET.

Meanwhile, West Texas Intermediate benchmark rose 0.16% at $36.71 a barrel at 9:30 a.m. CET. The European favourite Brent was up 1.17% at $35.32 at 2:22 p.m. CET. The Organisation of the Petroleum Exporting Countries reported its basket price for January 26 of $25.11 a barrel, lower compared to $25.58 a barrel a day before.

The U.S. dollar weakened against currencies of the gold exporting countries, such as the Canadian dollar (down 0.07%), the Australian dollar (down 0.62%), South African rand (down 0.27%) at 2:34 p.m. CET.

Breaking the News / ZR