Gold Advances Before Fed Minutes as Dollar Weakens

03:23 PM @ Wednesday - 09 July, 2014
Gold climbed as a drop in equities and the dollar spurred demand for an alternative investment amid increased holdings in the largest exchange-traded product. Palladium headed for the longest rally in 14 years.

Bullion for immediate delivery advanced as much as 0.5 percent to $1,326.18 an ounce, the highest price since July 3, according to Bloomberg generic pricing. The metal traded at $1,324.81 at 7:49 a.m. in London, 10 percent higher this year.

Asian stocks fell for a second day today, while the Bloomberg Dollar Spot Index held losses before the U.S. Federal Reserve releases minutes of its June 17-18 meeting, when it cut asset purchases for a fifth time. Holdings in the SPDR Gold Trust expanded to 800.28 metric tons yesterday, erasing this year’s decline in assets, as U.S. equity benchmarks retreated.

“Stocks pulled back and the dollar remained weak, which supports gold,” said Sarah Xie, a Hong Kong-based analyst at Wing Fung Financial Group Ltd. “Though investors expect an early rate hike, the Fed Reserve might be conservative. Gold may rebound if the minutes let investors down.”

Gold for August delivery climbed 0.7 percent to $1,326.30 an ounce on the Comex.

The Fed has kept its benchmark lending rate near zero percent since December 2008 to spur growth even as it scaled back bond-buying. Minneapolis Fed President Narayana Kocherlakota said yesterday inflation may run below the central bank’s target, while Richmond counterpart Jeffrey Lacker tempered his previous expectation for more robust growth.

Palladium for immediate delivery advanced 0.1 percent to $873.76 an ounce after climbing yesterday to $875.25, the highest since February 2001. A 13th day of gains today would be the longest streak since June 2000. Assets in exchange-traded products backed by the metal rose to a record yesterday, according to data compiled by Bloomberg.

Spot silver rose 0.5 percent to $21.1494 an ounce, while platinum increased 0.4 percent to $1,502.13 an ounce.
LinkedInPinterest

OTHERS

More News