Tag Archives: Federal Reserve

Gold Inches up After Fed Officials’ Comments on Stimulus

3 Jul

Gold edged higher on Wednesday after a near 1 percent fall in the previous session, as two Federal Reserve officials said the U.S. central bank was likely to continue supporting the economy through asset purchases for some time.

GoldGold edged higher on Wednesday after a near 1 percent fall in the previous session, as two Federal Reserve officials said the US central bank was likely to continue supporting the economy through asset purchases for some time.

FUNDAMENTALS

* Spot gold rose 0.2 percent to USD 1,244.06 an ounce by 0014 GMT, while US gold was little changed at USD 1,243.5. Spot gold fell 0.9 percent on Tuesday as the dollar strengthened.

* Bullion, typically seen as a hedge against inflation, has taken a beating since Fed Chairman Ben Bernanke said last month the economy was recovering strongly enough for the central bank to begin tapering its stimulus in the next few months, and possibly end the programme in mid-2014.

* Gold posted its biggest ever quarterly loss of 23 percent for the April-June period, but began the third quarter on a positive note.

* Investors are awaiting US data this week to determine the strength of the economy and the exact timing of the Fed tapering.

* The Fed’s easy monetary policy will likely be warranted for “quite some time” as the US central bank drives down high unemployment while nudging low inflation back toward target, Fed Board Governor Jerome Powell said on Tuesday.

* The head of the Federal Reserve Bank of New York on Tuesday reiterated that the US central bank will likely continue to support the economic recovery for some time to come despite market worries that it was soon pulling back.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.37 percent to 964.69 tonnes on Tuesday.

* Gold traders in India, the world’s biggest buyer of the metal, stayed on the sidelines on Tuesday, and premiums continued to get support from lower supplies due to restrictions by the central bank.

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MARKET NEWS

* The US dollar hit its highest in a month against the yen and euro on Tuesday while a gauge of global equities fell as US stocks reversed course to end slightly lower.

 

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Gold inches up as Fed officials downplay stimulus wind-down

25 Jun

Spot gold rose 0.2 percent to $1,283.55 an ounce by 0018 GMT. It fell around 1 percent on Monday

Gold edged higher on Tuesday as the dollar weakened after two top Federal Reserve officials downplayed an imminent end to monetary stimulus.

Bullion is still down more than 7 percent since the start of last week due to worries over an early end to the Fed’s USD 85 billion monthly bond purchases and a cash crunch in China.

 Fundamentals

* Spot gold rose 0.2 percent to USD 1,283.55 an ounce by 0018 GMT. It fell around 1 percent on Monday, extending last week’s 7 percent slide as fears of a cash crunch in China spooked investors, and a slide in US equities prompted bullion selling to cover margin calls.

* Comex gold rose USD 6 to $1,283.10.

* Last Wednesday, Federal Reserve Chairman Ben Bernanke gave his most explicit signal yet that the US central bank was considering scaling back its USD 85 billion per month of Treasuries and mortgage-backed debt purchases.

* On Monday, Minneapolis Fed President Narayana Kocherlakota said investors were wrong to view the central bank as having become more keen to tighten policy than it was before last week’s policy meeting.

* Dallas Fed President Richard Fisher said even if the bank dialled back stimulus this year, it will still be running an accommodative policy.

* Fears of a credit crunch in China’s banking system eased on Monday as short-term interest rates fell. The central bank said there were sufficient funds in the market but banks needed to improve cash management and control lending.

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*India’s biggest jewellers’ association has asked its members to stop selling gold bars and coins, about 35 percent of their business, adding to government efforts to cut gold imports and stem a swelling current account deficit.

* HSBC lowered its 2013 gold price forecast to USD 1,396 from USD 1,542 an ounce and its 2014 price to USD 1,435 from USD 1,600, mainly on the Fed’s plans to reduce economic stimulus and weak Chinese growth prospects.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.43 percent to 985.73 tonnes on Monday – its lowest in over four years.