Gold jumped to a 3 month high today, snapping a 3-day losing streak today after traders digested yesterday’s minutes meeting from the US Federal Reserve.
At 7.39pm (GMT) the price was trading at $1249 up from $1237 in yesterday’s close.
Although the fed noted in their latest minute that it would be appropriate to raise rates “fairly soon” , the statement wasn’t enough to impress investors who were expecting a more hawkish stance and now believe a rate hike in march may be off the table.
“The dollar weakness is one the primary reason that we are seeing this rally. Moreover, what traders are looking at is the probability of a rate hike in March and it is not great at all,” said Naeem Aslam, chief market analyst with Think Markets.
“This sentiment is providing a lot of tailwind for gold.” he added.
The Gold price also rallied after the January fed minutes but then pulled back and analysts are wondering whether this time round the rally is for real,
"Gold rallied after the January Fed minutes suggested that voting members were relaxed about having 'ample' time to respond to inflation pressure," said Tai Wong, director of base and precious metals trading for BMO Capital Markets in New York.
"It remains to be seen if their sanguine outlook has given the recently tentative gold bull the testosterone shot it needs to break decisively higher." he added.
A speech by Donald Trump next week to the US congress where he is expected t to outline some of his policies may keep a floor under the gold price until the US president brings more clarity to just what he intends to do.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72% of retail investor accounts lose money when trading CFDs with this broker. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72% of retail investor accounts lose money when trading CFDs with this broker. Before deciding to trade foreign exchange you should consider whether you understand how CFDs work, your investment objectives, your level of experience and readiness of taking risk. The possibility exists that you could sustain a loss of some or of all of your initial investments and therefore you should not risk more than you are prepared to lose. Please seek independent financial advice if necessary.
|By clicking "Continue" you will be redirected to the website operated by FIBO Group, LTD company registered in BVI and regulated by FSC. Please familiarize yourself with the Customer Agreement through the link. Click "Cancel" to remain on this page.|