Gold snapped a three-session losing streak Thursday to settle at a three-month high as the U.S. dollar lost ground to chief rivals the day after a fuzzier-than-expected interest-rate assessment from the Federal Reserve.
April gold GCJ7, +0.17% gained $18.10, or 1.5%, to settle at $1,251.40, its best settlement since Nov. 10, 2016, according to FactSet data. Some metals traders read the Fed minutes out Wednesday as casting doubt on the timing and pace of future rate increases.
In the notes from the Fed’s Jan. 31-Feb. 1 meeting, members indicated an interest in hiking rates “fairly soon,” but noted that the fiscal policy of President Donald Trump remained a wild card.
Earlier hints that the Fed would move to raise rates rapidly had led to a stronger dollar. That, in turn, usually provides a headwind to dollar-pegged assets including gold, making them less attractive to buyers using other monetary units.
Following the release of the minutes, the dollar, however, retreated and the WSJ Dollar Index, BUXX, +0.00% a measure of the U.S. dollar against 16 major currencies, fell 0.4% to 90.80 on Thursday. The ICE U.S. Dollar Index, DXY, +0.01% which gauges the buck against six rivals, edged down 0.1% to 101.10.
“The dollar weakness is one the primary reason that we are seeing this rally. Moreover, what traders are looking at is the probability of a rate hike in March and it is not great at all,” said Naeem Aslam, chief market analyst with Think Markets. “This sentiment is providing a lot of tailwind for gold.”
Gold held on to its morning gains and remained firm after a weekly report on jobless claims rising 6,000 to 244,000 in the week ended Feb. 18, near the 237,000 forecast by economists polled by MarketWatch and hanging around its lowest levels since the early 1970s.
The precious metal has also managed to break out of what Aslam referred to as an “ugly range” where it had been stuck for the past several days.
“Today traders just didn’t want to lose out or bet against a rising market,” said Jeffrey Nichols, senior economic adviser at Rosland Capital LLC.
The exchange-traded fund SPDR Gold Trust GLD, +0.87% advanced 1.1%. The iShares Silver ETF SLV, +0.76% added 0.5%, while the VanEck Vectors Gold Miners GDX, +0.16% climbed 0.9%.
In other metals trading on Comex, May silver SIK7, +0.58% rose 16 cents, or 0.9%, to settle at $18.18 an ounce. May copper HGK7, +0.77% fell 8 cents, or 3.2%, to settle at $2.66 a pound. June palladium PAM7, +0.37% rose $4.40, or 0.6%, to settle at $774.60 an ounce. April platinum PLJ7, +0.56% climbed $9.20, or 0.9%, to settle at $1,011.90 an ounce.
VISIT - Gold Crude Research
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