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Analysts: Fed Comments Holding Back Gold Prices
Allen Sykora
Allen Sykora Wednesday June 21, 2017 09:16

http://www.kitco.com/

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Influential U.S. Federal Reserve officials have sounded a hawkish tone on interest rates so far this week, which has dented gold prices, even though financial markets appear reluctant to factor in a significantly higher probability of another rate hike this year, analysts say. “Too many Fed speakers this week keeping gold from rally mode for now,” says George Gero, managing director with RBC Wealth Management. Comex August gold bottomed at $1,242.40 an ounce Tuesday, its lowest level since mid-May, and has bounced only slightly so far Wednesday, trading up 80 cents to $1,244.30 as of 8:59 a.m. EDT. “The main factor weighing on its price is presumably the firmer U.S. dollar after two members of the U.S. Federal Reserve – one being Fed Vice Chairman Stanley Fischer – highlighted the risks of low interest rates in their speeches yesterday,” says Commerzbank. “Previously, the influential president of the New York Fed [William Dudley] had already argued against pausing the rate-hike cycle. The market is not yet convinced nonetheless, as rate-hike expectations have still risen hardly at all.”

By Allen Sykora of Kitco News; [e-mail]