Gold prices gain in Asia on profit taking
Published Apr 10, 2014 11:42PM ET
Gold prices gain in Asia
Investing.com - Gold prices dipped slightly in Asia Friday in profit-taking after two days of gains.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at $1,320.00 a troy ounce, down 0.04%, after hitting an overnight session low of $1,311.10 and off a high of $1,324.90.
Overnight, gold prices rose on continued carryover from the minutes from the Federal Reserve's March policy meeting that revealed concerns among monetary authorities that U.S. consumer prices remain soft.
The Federal Reserve Board of Governors unanimously voted to scrap a threshold that would hike interest rates once the unemployment rate hits 6.5%, according to the minutes of the Fed's March policy meeting released on Wednesday, a sign monetary authorities are growing concerned over low inflation rates.
In the past, the Fed had indicated rates were set to rise when the unemployment rate hits 6.5% provided that figure accompanied a 2.5% inflation rate.
Today, the headline unemployment rate stands at 6.7%, not far from the previous threshold, though labor markets remain slack and inflation remains well below 2.5%.
The Federal Reserve decision to do away with its rate-hike threshold left markets convinced that interest rates will remain low for some time to come, even after the U.S. central bank winds down monetary stimulus programs.
Low borrowing costs weaken the dollar, thus making gold an attractive hedge.
Elsewhere on Thursday, the Labor Department reported that the number of individuals filing for initial jobless benefits in the week ending April 4 fell by 30,000 to 300,000, the lowest since May of 2007, from the previous week’s upwardly revised total of 332,000.
Analysts had expected jobless claims to decline to 320,000, though the numbers did little to boost the dollar and halt gold's advance.
Meanwhile, silver for May delivery was down 0.31% at US$20.028 a troy ounce, while copper futures for May delivery were down 0.06% at US$3.037 a pound.
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Written By: Investing.com
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