Gold rises to 1-month peak on Fed speculation

Gold rises to 1-month peak on Fed speculation

12 January 2015, 08:52
News
0
362

Gold jumped to a one-month high on speculation that the Federal Reserve will not hurry in raising interest rates, weakening the greenback and stimulating demand for the precious metal. 

As Bloomber reports, bullion for immediate delivery advanced as much as 0.7 percent to $1,231.29 an ounce, the highest price since Dec. 11, and traded at $1,227.91 at 3:07 p.m. in Singapore. The precious metal climbed 1.2 percent on Jan. 9 to cap the biggest weekly gain since June as assets in the SPDR Gold Trust, the world’s largest exchange-traded product backed by bullion, rose the most since July.

The Bloomberg Dollar Spot Index extended losses for a second day from a record close on Jan. 8, after data on Jan. 9 showed average hourly earnings for all U.S. employees fell in December by the most since comparable records began in 2006. Data on Jan. 9 showed that U.S. employers added 252,000 jobs last month.

“The U.S. wages data overshadowed growth in jobs,” Huang Wei, an analyst at Huatai Great Wall Futures Co., wrote in a note. “It supports the possibility that the Federal Reserve may go slow on raising interest rates.”

As Greece prepares for a Jan. 25 election, Prime Minister Antonis Samaras has said it may lead to an exit from the currency bloc if the opposition Syriza party wins. This sent the gold priced in euros to the highest level since September 2013.

Political uncertainty in the country that triggered the region’s sovereign-debt crisis in 2009 comes at a time when the European Central Bank is trying to stave off deflation and revive growth.

“Gold looks to be supported this week by risk aversion in Europe brought about by Greece, as well as physical demand in Asia before the Lunar New Year,” Huang wrote. The Lunar New Year begins Feb. 19.

Gold for February delivery gained as much as 1.3 percent to $1,231.30 an ounce on the Comex in New York, the highest since Dec. 11. Most-active prices climbed 2.5 percent last week.

Silver and platinum also advanced.

Silver for immediate delivery rose 0.7 percent to $16.6161 an ounce, after posting the first weekly increase in four. Platinum added as much as 0.3 percent to $1,237.19 an ounce, the highest price since Dec. 12, and traded at $1,235.63. Palladium was little changed at $803.25 an ounce.

Share it with friends: