Gold gains as markets bets on Fed keeping rates low
Published Jun 27, 2014 02:26PM ET
Gold gains on bets for interest rates to remain low
Investing.com - Gold futures rose on Friday as the dollar fell amid market sentiment that the Federal Reserve will keep interest rates low well into 2015 despite comments from the head of the U.S. central bank's St. Louis branch suggesting otherwise.
Gold and the dollar tend to trade inversely with one another.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at 1,319.50 a troy ounce during U.S. trading, up 0.19%, up from a session low of $1,313.60 and off a high of $1,323.10.
The August contract settled down 0.42% at $1,317.00 on Thursday.
Futures were likely to find support at $1,305.40 a troy ounce, Tuesday's low, and resistance at $1,326.60, Tuesday's high.
On Thursday, St. Louis Federal Reserve President James Bullard told Fox Business Network that an improving economy may make conditions ripe for interest rates to rise possibly in early 2015.
The dollar rose and gold weakened initially, though investors digested Bullard's comments and took them in stride, as he is a known inflation hawk and is a non-voting member of the Federal Open Market Committee, which gave room to rise on demand from bargain hunters.
Elsewhere, the revised Thomson Reuters/University of Michigan consumer sentiment index rose to 82.5 in June from 81.2 in May, beating expectations for a 82.2 reading.
While that and other economic indicators point to a U.S. economy that is continues to improve, market expectations persist that interest rates will remain low in order to ensure recovery remains on track.
Meanwhile, silver for September delivery was down 0.10% at $21.140 a troy ounce, while copper futures for September delivery were down 0.18% at $3.166 a pound.
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Written By: Investing.com
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