Gold Prices Inch Higher Ahead Of Fed

Gold Prices Inch Higher Ahead Of Fed
News
Like Us On Facebook
Like Us On Facebook

Gold prices were trading slightly higher as investors awaited the Federal Reserve’s potentially market-moving announcement Thursday, which could signal some form of quantitative easing.

Gold for December delivery was rising $1.70 to $1,735.40 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,738.50 and as low as $1,730.80 an ounce, while the spot price was rising $1.50, according to Kitco’s gold index.

“Any kind of further easing, be it another round of quantitative easing through QE3, would almost certainly be gold positive,” said Will Rhind, managing director of ETF Securities U.S. “Were it to materialize today I think we would see gold react positive, I don’t think it has been priced in fully.”

Gold prices have rallied since Fed Chairman Ben Bernanke said at the Jackson Hole, Wyo., economic summit that he was open to the idea of a fresh round of easing. The yellow metal leaped again last Friday when the U.S. monthly employment report came in weaker than expected. The number confirmed Bernanke’s grave concern of labor market softness, and investors fled to gold as a safe haven in anticipation that more easing could boost inflation in the long term.

Silver prices for December delivery were dipping 7 cents to $33.22 an ounce, while the U.S. dollar index was effectively flat at $79.71.

There are a number of scenarios that could unfold Thursday afternoon, with the most extreme option being a massive bond-buying and mortgage buying program from the Fed — similar to the monetary stimulus implemented after the 2008 financial crisis — or the opposite option of the central bank punting QE3 to its next meeting.

Rhind said that even with gold’s recent rally, another boost in the event of Fed action is unlikely to have already been priced in. What investors should watch are the details of the plan, if one is even presented Thursday.

“Obviously there’s going to be a quantum of the program: How long it’s going to go on for, the size and scope of it. So all of that is a variable that is unknown at the moment,” said Rhind. “We can look back to QEI and QEII and that did have a decent effect on the price after that was actually implemented.”

Gold mining stocks were mostly lower at the market opening on Thursday. Shares of NovaGold Resources (NG) were falling 3.1%, while AngloGold Ashanti (AU) was dipping 1.8%.

Among other mining stocks, Gold Fields (GFI) was down 1.1%.

SPDR Gold Trust (GLD) was down 0.18%, as iShares Gold Trust (IAU) fell 0.26%.

via The Street

Share Tweet
React
Like Us On Facebook
Like Us On Facebook

Julian Sonny

From the sandy beaches of Hawaii, to the streets of New York: Julian has seen it all. His lifetime of travels has given him a broad scope of knowledge and an eclectic taste unlike any other in the tri-state area. Julian has often been compared to cultural icon, The Rock, because of his unequivocal work ethic and warrior-like stature.

More In News

World Sean Levinson

White Woman Sues Sperm Bank After Having A Black Baby

A Chicago-area sperm bank is being sued by a white Ohio woman after it mistakenly sent her vials of sperm from an African American man. Jennifer Cramblett, who ordered sperm from a white man for her and her partner, only learned that her daughter, Payton, would be half-black after becoming pregnant in April of 2012. […]

World Emily Arata

Girl Miraculously Found In Mexico After Missing For 12 Years

Sabrina Allen went missing 12 years ago and has finally been returned to the custody of her father, Greg. Allen, who disappeared from her Austin, Texas, home at just 4 years old, was kidnapped by her mother, Dara Llorens. As per the terms of Llorens’ custody agreement, she took the little girl for a weekend visit. […]

World Sean Levinson

Ebola Patient In The US May Have Exposed Dozens To The Disease

The man identified as the first person to be diagnosed with Ebola in the US came into contact with over a dozen people, some of whom were children, before being diagnosed and quarantined. According to Dallas news station WFAA, five children ranging from elementary to high school students may have been exposed to the virus and […]

Also On Elite

News

Alibaba CEO Jack Ma Says If You’re Still Poor At 35, It Is Your Fault

Alibaba executive chairman and cofounder Jack Ma has provided a reality check for those wondering why they haven’t been blessed with success. The recently-crowned richest man in China wrote an op-ed claiming that if someone is still poor at 35 years old, that person has no one to blame but him or herself. Translated from […]

World

OMFG: Science Says A Glass Of Red Wine May Be Equivalent To An Hour At The Gym

Have our prayers been answered? Have those glasses of wine I consumed post-workout last night been rationalized? Is it too good to be true? According to a study on the health benefits of red wine, your body could receive the same benefits from drinking wine as hitting the gym for an hour of sweat-inducing exercise. […]