(Kitco News) - Comex gold futures saw an initial moderately bearish price reaction to Wednesday afternoon’s highly anticipated Federal Reserve Open Market Committee (FOMC) statement and the ensuing press conference held by Fed Chairman Bernanke.
Comex August gold last traded down $8.00 at $1,358.80 an ounce. Spot gold was last quoted down $8.00 at $1,360.75.
July Comex silver last traded down $0.282 at $21.38 an ounce.
The FOMC said U.S. monetary policy will not see an imminent change even though the economy is expanding moderately.
There was no mention about tapering of the Fed’s monthly bond-buying program in the statement.
However, Bernanke at his press conference did hint that the Fed in the coming months will back off the accelerator on its monthly bond buying.
When asked by a reporter about his job and whether he will keep it, Bernanke said he would not touch upon his future plans at this time.
The U.S. dollar index rallied sharply in the aftermath of the FOMC statement, which in turn put downside price pressure on the gold and silver markets.
Heavy short covering was featured in the dollar index as it had hit a four-month low early on Wednesday.
The greenback bears still have the overall near-term technical advantage, which is still an underlying bullish factor for the precious metals markets.
Crude oil prices were slightly lower Wednesday afternoon but did hit a four-month high overnight.
With Nymex crude prices presently just below $99.00 a barrel and trending higher the past three weeks, the precious metals bulls are rooting for prices to hit the $100.00 mark, which would give a psychological boost to the entire raw commodity sector, including the precious metals.
There is civil unrest in Turkey and Brazil that traders and investors are monitoring. The gold market saw selling interest limited on this news.
If the situations there see an escalation and violence in the streets, the gold market could see some safe-haven demand surface.
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