Yesterday the Federal Reserve provided new dovish remarks which sent odds makers scrambling over whether or not the central bank would raise rates between now and the end of the year. And with economic conditions, as well as the dollar sinking deeper towards recession, gold prices responded with a huge jump over $1260, and to their highest level in six weeks.
Gold prices marched higher Thursday following a Federal Reserve policy update that was read as mostly dovish by investors, supporting gains for the commodity.
August gold GCQ7, +0.74% was up 8.40, or 0.7%, to $1,257.90 an ounce, paring a bit after reaching an intraday peak at $1,265. A finish around its current level would be close to the highest since June 14, according to FactSet data. September silverSIU7, +0.64% also jumped 19 cents, or 1.2%, to $16.765 an ounce, also off its intraday high of around $16.81. – Marketwatch
Additionally because of the Fed’s commentary and reactions by the dollar heading towards a 92 handle on the index, analysts are now changing their former negative forecasts for gold and see the price heading towards $1300 in the near future.
The dollar index could certainly drop to the 92 mark (about 1.5 percent below its closing price Wednesday of 93.40), said Phillip Streible, senior market strategist at RJO Futures. And though these levels are important to watch in the dollar, what’s more interesting to him is the impact on gold prices and other commodities.
“We could really see other markets, like gold, push up through that $1,300 level. We could see silver recapture $18. We could see oil prices — they’ve already got some bullish fundamentals buoying them — but with the dollar selling off like this, you are probably going to see that … recapture $50 again,” he said Wednesday on CNBC’s “Trading Nation.” – CNBC
Source: The Daily Economist