Gold futures were seen climbing on Thursday as the US dollar weakened after the release of the Federal Reserve (Fed) minutes which eased concerns that the central bank would increase interest rates soon.
Gold deliveries for June advanced 0.77% to $1316.00 an ounce at the time of writing on New York’s Comes at the time of writing, while futures for silver edged 0.88% higher to $19.945 an ounce at the same time.
The contract closed 0.76% on Tuesday and 0.32% higher on Wednesday, boosted by the ongoing tension between Ukraine and Russia and the weakened greenback.
Holdings in the world largest gold-backed exchange traded fund, SPDR Gold Trust; were unchanged from Wednesday after dropping to 806.48 metric tons on April 8.
Gold – Fed Minutes
On Wednesday, the US Federal Reserve (Fed) released minutes from its March meeting which showed that policymakers discussed comments made by the Fed Chair Janet Yellen on possibly increasing the interest rates in the next six months after ending the US quantitative easing program. Policymakers said predictions for an interest rate rise might be overstated, according to the minutes.
“The minutes gave a clear message to markets that interest rates are staying low for a long time,” Chris Weston, chief market strategist at Melbourne-based IG, wrote in a note. “However they won’t stay low forever. It also seems that they were designed to be the final word on the interest rate debate that has been ragging since Janet Yellen (seemingly) mistakenly said there would be six month lag between rounding off the bond-buying program and the Fed hiking rates,” he added.
The US central bank reduced its monthly bond-purchases by $10 billion at each of the past three meetings, leaving the purchases at $55 billion.
The yellow metal dropped by 28% last year on worries that the world’s largest economy grew, which would signify the end of monetary stimulus.
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