Gold price churns ahead of potential Fed rate-hike clues
London (Feb 22) Gold prices churned little moved for a second straight day on Wednesday with investors reluctant to stick out their necks ahead of a highly anticipated afternoon Federal Reserve release.
April gold GCJ7, +0.03% slipped 70 cents, or less than 0.1%, to $1,238.10 an ounce. May silver SIK7, -0.11% traded down 4 cents, or 0.2%, at $18.04 an ounce.
Investors were awaiting the 2 p.m. Eastern release of the Fed’s minutes from its Jan. 31-Feb. 1 policy meeting to get more clarity about the central bank’s possible next move. Higher rates typically lead to a stronger dollar. That, in turn, usually provides a headwind to dollar-pegged assets including gold, making them less attractive to buyers using other monetary units.
“A hawkish tone echoing remarks from a broad range of central bank officials including Chair Janet Yellen that bolsters the probability of a March rate hike is likely boost the greenback and baseline yields alike. Needless to say, that is likely to bode ill for alternative store-of-value assets including the yellow metal,” said Ilya Spivak, currency and metals strategist with Daily FX.
The WSJ Dollar Index BUXX, +0.01% , a measure of the U.S. dollar against 16 major currencies, was up 0.1% at 91.34 but had dipped as low as 91.12. The ICE U.S. Dollar Index DXY, +0.15% , which gauges the buck against six rivals, rose 0.2% to 101.62 after twisting higher and lower.
On Tuesday, the dollar index closed at its highest since January 12 after Philadelphia Fed President Patrick Harker said he would likely support an interest-rate increase at the central bank’s March meeting if the data support such a move.
As metals prices stalled, the exchange-traded fund SPDR Gold Trust GLD, +0.06% was up a slim 0.1% premarket. The iShares Silver ETF SLV, -0.18% was little changed, while the VanEck Vectors Gold Miners GDX, +0.20% fell 0.1%.
In other metals on Comex, May copper HGK7, -1.05% fell 3 cents, or 1%, to $2.73 a pound. The industrial metal has been trading around a one-week high on the back of production suspensions at major mines, but pared those gains somewhat.
Meanwhile, June palladium PAM7, +0.11% rose $1.55, or 0.2%, at $781.70 an ounce, and April platinum PAJ7, +0.30% was at $1,003.80 an ounce, down $2.20 or 0.2%.
Source: MarketWatch
