The price of gold renewed a 1-month-low on Thursday against the backdrop of the rising dollar after the US Federal Reserve raised the basic interest rate. Which served as a signal of a hardline monetary and credit policy for 2017.
The US regulator raised its federal lending key interest rate by 1/4 point up to the 0,50-0,75% range, as were the expectations in financial markets.
But the rise of the dollar and other markets were strongly influenced by the signal that Fed might raise the interest rates three times instead of the expected two.
In the afternoon, gold was traded at $1.130,16 /ounce, against $1.144,12/ounce at yesterday’s session’s closing time.
Gold futures in the States went down by 33. 9 dollars to $1.129,8/ ounce.
Experts point out that the interest rate raise has already been reflected in prices and today’s decrease in the value of the precious metal is simply a reaction to the promise for a threefold interest rate raise in 2017.
The pressure on the quotes is easy to explain if we look at the profitability increase of US state bonds and the exchange rate of the dollar, which followed the Fed’s decisions.
“The prospects before gold are not so good. Fed’s aggressive comments may further push down its price, short-term. Today’s sale was just the beginning.
Of course, right now everybody is playing against gold, bearing in mind the upward trend of the dollar exchange rate.”, says ANZ analyst Daniel Hynes, quoted by Reuters.
On Thursday “green money” touched a 14-year high against the 6 basic currencies basket.
The reserves of the world’s largest gold stock fund – (ETF) SPDR Gold Trust – fell yesterday by 0.8 percent to 849,44 tonnes.
ETF’s sales are a result of the lack of investment appetites towards the gold trade. The feeble physical gold sales in China and India also weren’t of great help to the valuable metal.
On Thursaday, silver was traded at $16,155/ ounce compared to $16,825/ ounce at closing-down time on Tuesday. Platinum fell to $911,50/ ounce against $923,80, and palladium came down slightly to $719,00, in comparison to its previous price of $719,72/ ounce.