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Gold finds its feet as bitcoin finds no shortage of steam

The gold price is finding its feet again after a disappointing week. Reuters reported spot gold rising 0.2 percent to $1,227.33 per ounce at 0707 GMT. Spot gold rose 0.5% in the previous session, its best one-day gain in a month. Meanwhile U.S. gold futures were 0.3 percent higher at $1,227.20 an ounce.

Reuters went on to report that “new applications for U.S. jobless benefits unexpectedly fell last week, while producer prices rebounded strongly in April, pointing to a tightening labour market and rising inflation that could spur the Federal Reserve to raise interest rates in June”.

A rate hike has been on the cards for some time now, with the Fed pointing to repeated small hikes. Rate hikes usually have an inverse relationship to the gold price, as it increases the opportunity cost of not holding interest-bearing assets. Gold does not have a yield and thus appears relatively unattractive.

Marketwatch reported Boston Fed President Eric Rosengren remarks on Wednesday that it would be “reasonable to have three rate increases over the remainder of this year”.  

In other news bitcoin continues its solid run, moving above $1,800. According to CityAM it was up 3.1% last night at $1,811.95, having reached $1,839 earlier in the day. These steady follow the passing, for the first time, of the $1,700 mark on Tuesday. In February bitcoin matched the price of gold for a single unit.

Image credit: BTC Keychain. Edited with TVScanline

Link to this article: : http://www.goldmadesimplenews.com/gold/gold-finds-its-feet-as-bitcoin-finds-no-shortage-of-steam-13141/

Posted by on May 12 2017. Filed under Gold News, Markets. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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