Gold Rises, Shakes off Losses, on Dovish Fed Minutes
October 08 2015 - 3:19PM
Dow Jones News
By Tatyana Shumsky
Gold prices rushed higher, shaking off earlier losses Thursday,
as a dovish tone in the Federal Reserve's meeting minutes bolstered
investor speculation that officials would hold off on raising
interest rates.
In response, the most actively traded contract, for December
delivery, rose 0.2% to hit the day's high of $1,150.90 a troy ounce
on the Comex division of the New York Mercantile Exchange.
Fed policy-committee members highlighted concerns about
stubbornly low inflation and the escalating threat that China's
economic slowdown would trip up growth in the U.S. All but one
member concluded that, despite stronger domestic growth and
improved labor-market strength, economic conditions didn't warrant
tighter monetary policy.
In the weeks since the Fed's Sept. 16-17 meeting, economic
reports showed U.S. hiring gains slowed in August and expansion in
manufacturing activity lost steam.
"The Fed felt that global weakness was enough to keep interest
rates at zero, and now we have new data points which talk about
domestic weakness, " said James Cordier, president of
OptionsSellers.com in Tampa, Fla. "If you add that up...it's hard
to imagine an interest rate increase in December," he said.
Any delay to higher rates benefits gold, which pays its holders
nothing and would struggle to compete with yield-bearing
investments once rates climb.
Gold futures had settled down 0.4% at $1,144.30 an ounce roughly
half an hour before the Fed minutes were released, but prices
rebounded from those losses in after-market trading.
Write to Tatyana Shumsky at tatyana.shumsky@wsj.com
(END) Dow Jones Newswires
October 08, 2015 15:04 ET (19:04 GMT)
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