Le Pen and Fed news squeeze Gold price from both sides
Bulliondesk has reported today that spot gold prices were down 0.2% at $1,234.16/oz whilst silver was off 0.3%. Metals had a slight dip, with prices down 0.3% on average. Volume sits around 6,164 lots traded.
The indifferent nature of the gold price today comes as a result shorter-term influencers effecting a long term, gradual upward trend for the gold price. One, which is acting negatively on the gold price, is Philadelphia Federal Reserve Bank president Patrick Harker’s comments in a Market News International interview that he would likely support a rate hike at the Federal Open Market committee meeting in March if current trends continue or increase with regards to inflation. This had the effect of a rise in the value of the dollar and treasury yields, according to Marketwatch.
Whilst such comments often put gold markets on edge, the markets put the chance of a rate hike at only 22.1%, according to CME’s Fed Watch tool.
However, this potential dampening of the gold price by Fed anticipation was countered by news from European politics. Poll data from France showed Front National presidential candidate, Marine Le Pen, was increasing her support in the race, having previously been dismissed as a sure-bet loser in the second electoral round.
Her support has increased as much as 2% since a poll conducted on the 8th February, according to Marketwatch.
In mining news, concerns grow over Russia’s largest gold producer Polyus. They have had record level profits, production and cash flow, yet underwhelming investment, owing to a low propensity toward Russian risk. Scepticism resulting from sour relations have damaged investor relations, according to the Financial Times.
“The corporate governance and structure is not that transparent. There is usually ownership structures in place that [mean] equity holders have less say in things than perhaps other companies,” one anonymous source told the paper.
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