Gold trading ‘as a stock’ following likely deferral of interest rate hike

Photo credit: carmen_seaby. Edited with TVScanline Effect

The gold price received a significant boost on Thursday following the release of Fed minutes suggesting a US interest rate hike was likely in summer (June or August) rather than spring (March). This pushed US bond yields down and stalled the upward momentum of the US Dollar.

CNBC reported the gold price at a three month high with spot gold up 0.75 percent at $1,246.358 per ounce, while U.S. gold futures rose 1.17 percent to $1,247.70.

This year, despite a rise in equities, the gold price has been going up, suggesting a breakdown in the traditional inverse relationship between the gold price and the markets. “There’s a lot going on – to me gold trades as a stock now,” Brett McGonegal, CEO of Capital Link International told CNBC’s Squawkbox. “I’m not so sure it acts as it has historically as a hedge to inflation or flight to safety. We’re seeing this ETF [Exchange Traded Funds] trend which is how people are pricing gold these days. There’s a lot of complexities.”

A dip in the Dollar also helped gold stay steady, despite a relatively recent rally of the greenback following worries of political uncertainty in Europe. Forbes also reported a three and half month high for the silver price, up $0.20 at $18.15 an ounce.

Link to this article: : http://www.goldmadesimplenews.com/gold/gold-price-trading-as-a-stock-following-deferring-of-rate-hike-12992/

Posted by on Feb 23 2017. Filed under Gold News, Markets, Silver News. 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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