Fx Empire | Jul 17, 2014 03:30AM ET
Gold added $5.20 as traders took advantage of the weak prices to buy up the commodity in the Asian session. Gold is trading at 1305.00 while silver added 117 points to trade at 20.892 and platinum edged higher to 1495.45. After two consecutive days of sharp declines, Gold rebounded on Wednesday as sharp declines gave an opportunity for bargain buying supporting prices. However, strong U.S. economic outlook and fears that the Federal Reserve could raise U.S. interest rates limited gains for the safe haven. U.S. manufacturing output rose at its fastest pace in more than two years in the second quarter, suggesting the economy was regaining enough momentum to lift growth throughout the year.
The metal broke below $1,300 for the first time since June 19 on Tuesday after a Fed report showed its balance sheet would top out at $4.5 trillion when its bond-buying program ends in October – a timeline consistent with what Fed policymakers had said previously. Gold’s gains also fizzled after Dallas Fed President Richard Fisher said on Wednesday the central bank is “likely” to start raising interest rates gradually early next year and should begin shrinking its massive balance sheet in October to signal its confidence in the recovery.
Gold was steady near a 4 week low today trading just below $1300 just before it bounced up as stronger equities and data dimmed its safe haven appeal while investors weighed the possibility of sooner than expected interest rate increases in the US. Strong U.S. manufacturing and housing data on Wednesday stoked fears that a strong economic recovery could prompt the Fed to act soon. SPDR Gold Trust (ARCA:GLD), the world’s largest gold-backed exchange-traded fund, said its holdings fell 2.7 tonnes to 806.03 tonnes on Wednesday. U.S. precious metals dealer Anthem Vault said it has launched the first digital currency backed by physical gold, with an aim to increase the use of bullion as an accepted form of electronic money. Gold prices are expected to move in a range to down for the day.
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