(Kitco News) - Gold prices ended the U.S. day session with solid gains and hit a three-week high Thursday. Prices did back down from the early gains to close near the middle of the day’s trading range. A combination of heavy short covering in the futures market, bargain hunting and safe-haven buying boosted the yellow metal. The technical posture for gold has also become much less bearish this week. December Comex gold was last up $19.60 at $1,225.70 an ounce. Spot gold was last quoted up $3.60 at $1,225.50. December Comex silver last traded up $0.376 at $17.44 an ounce. The big sell-off in the U.S. stock Thursday added to the safe-haven demand for gold. This recent higher volatility in the stock market is a bearish warning signal of a topping process in the stock indexes. If the U.S. stock indexes to top out, that would be a significant underlying bullish factor for gold and the other precious metals markets. Traders were still digesting the dovish Federal Reserve Open Market Committee (FOMC) minutes released Wednesday. The Fed expressed increasing concern about weakening world economies and some FOMC members questioned whether the appreciation of the U.S. dollar against the other major currencies might act as a drag on the U.S. economy. The market place reckons the FOMC minutes hint the Fed may have to hold off longer on raising U.S. interest rates, given the increasing concerns about weakening world economies—especially the serious weakness coming out of the European Union. Importantly, the FOMC minutes also suggested the Fed is worried about the recent appreciation of the U.S. dollar curtailing U.S. economic growth. The U.S. dollar index sold off overnight on the FOMC news, but rallied during the U.S. day session as the U.S. stock market sold off. The London P.M. gold fix was $1,226.75 versus the previous London A.M. fixing of $1,227.50.
Posted on: Thu, 09 Oct 2014 23:59:21 +0000
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