New York, US (BBN) – Gold prices gained in Asia on Thursday despite a strong signal from Fed minutes that a rate hike sooner rather than later is on the cards.
Gold for April delivery on the Comex division of the New York Mercantile Exchange rose 0.32 per cent to $1,237.15, while silver traded up 0.18 per cent to $17.983 a troy ounce. Copper eased 0.26 per cent to $2.729 a pound, reports
Overnight, gold futures drifted lower as the dollar gained momentum, as traders noted the minutes from the Federal Reserve Open Market Committee (FOMC) that suggested a rate hike “fairly soon.”
The meeting was the first since Trump took office saw FOMC members report higher levels of confidence in the business community.
And they predicted that the expected increase in economic growth related to Trump’s policy proposals could push the Fed into action.
“Many participants expressed the view that it might be appropriate to raise the federal funds rate again fairly soon” if data on jobs and inflation are “in line with or stronger than their current expectations,” or if the risk increased that the Fed might overshoot its goals, the meeting summary stated.
Gold is sensitive to moves in US rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.