Stock:
Symbol Lookup
Register | Login
...
History
...
...

Pre Market | Dow Jones | Gold | Newsletters | Learn


Gold Prices Settle Higher, Fed Unlikely to Halt QE3

Wednesday, January 30, 2013 4:05 AM
Gold prices settled higher on Tuesday after logging losses in previous four sessions as bullion’s inflation hedge bets received support from growing expectations that the Federal Reserve will not put its quantitative easing on hold while weaker dollar also lifted the demand for dollar-dominated commodities. Gold futures for February delivery edged up $7.90 an ounce or 0.5% to settle at $1,660.80 an ounce while spot gold gained around 0.5% to trade near $1,662 an ounce. On Monday, spot gold plunged to its 2 ½ week low level at $ 1,651.93 an ounce and gold futures slumped $40 or 2.4% in last four sessions. The SPDR Gold Trust (ETF) (NYSE: GLD) ended the day 0.44% higher at $160.99. The Federal Reserve began its two-day monetary policy meeting on Tuesday and on Wednesday it is expected to announce its policy statement.  Even though there was growing fear that the Fed might curtail or scale down its current economic stimulating measure or QE3, many experts envisage that the central bank will continue to purchase $85 billion assets purchases from the financial markets. Earlier in January when the Federal Reserve released minutes from its last FOMC, it showed that several top policy makers were extremely edgy over central bank’s unprecedented asset purchase program. This led to speculation that Fed will now be in hurry to close its QE3, weighing on bullion’s hedge appeal.  Series of some better-than-expected economic indicators also put the pressure on prices since Fed’s current QE is closely tied to the improvement in the U.S. economy and labor market. However, experts believe that Federal Reserve will be reluctant to halt its asset purchase program for the time being as unemployment level, which was steady at 7.8% in January, is not likely to fall to level desired by the Federal Reserve. Back in December, the Federal Reserve pledged to support the economy with its economic stimulating measures until the unemployment level drops to 6.5%, provided inflation remains under control. “What's going to come out of the Fed is more of the same, so we can just anticipate that (quantitative easing) is here at least for a little while longer,” wrote Jeffrey Sica, chief investment officer of SICA Wealth, who manages more than $1 billion in client assets, in a note to investors. Echoing the sentiment, David Morgan, publisher of investment newsletter the Morgan Report, said, “The most knowledgeable precious-metals traders expect a renewed commitment at the Fed to continue asset buying,” added Morgan. That means more QE for the indefinite future, which is long-term bearish for the U.S. bond market and “theoretically positive” for gold.” Nevertheless, Morgan believes that Fed’s policy statement will not spark off any rally in the bullion market as investors have already factored in the fact that QE3 will stay for now. On Tuesday, bullion was also supported by weakness in the U.S. dollar. The ICE dollar Index, a gauge on U.S. unit’s performance against a basket of six major traded currencies, fell to 79.582 on Tuesday, from 79.790 in late North America trade on Monday. Nonetheless, gold prices are down 0.9% YTD while platinum group metals have rallied due to improving industrial activities around the world. “Arguably, the current macro sentiment is more upbeat than at any point since the 2008 crisis, denying bullion its traditional safe-haven properties,” said Andrey Kryuchenkov, analyst at VTB Capital in London, in a note to investors. Moving to some other precious metal markets, silver futures for March delivery gained 40 cents an ounce or 1.3% to close at $31.18. Platinum for April contract tacked higher $16.70 an ounce or 1% to end the day at $1,678.90 while palladium futures of March delivery jumped $9.20 an ounce or 1.2% to settle at $749.75.
PRINT

FREE Options Trading Lessons
I'll show you how to unlock HUGE Gains with Options Trading
Let's make 2015 the year you get RICH!

Latest Headlines

Energy cost plunge pulls down euro zone producer prices in JanuaryEnergy cost plunge pulls down euro zone producer prices in January
BRUSSELS (Reuters) - Euro zone producer prices fell by more than expected in January, pulled down by plunging costs of energy, data from the European Union`s statistics office Eurostat showed on Tuesd...
EBRD agrees lending to Greece until end of 2020: EBRD presidentEBRD agrees lending to Greece until end of 2020: EBRD president
BRUSSELS (Reuters) - The European Bank of Reconstruction and Development (EBRD) has cleared the provision of cheap aid and funding support until the end of 2020 to Greece, EBRD President Suma Chakraba...
Barclays gives information to U.S. precious metals probeBarclays gives information to U.S. precious metals probe
LONDON (Reuters) - Barclays has been providing information to an investigation into precious metals by the U.S. Department of Justice (DoJ), the bank said in its 2014 annual report on Tuesday, a wee...
Barclays says has provided information to Department of Justice metals probeBarclays says has provided information to Department of Justice metals probe
LONDON (Reuters) - Barclays said in its 2014 annual report on Tuesday that it has been providing information to an investigation into precious metals by the U.S. Department of Justice, a week after a ...
China vice finance minister says will keep fiscal policy proactiveChina vice finance minister says will keep fiscal policy proactive
SHANGHAI (Reuters) - China`s vice finance minister Zhu Guangyao said China`s fiscal policy will remain proactive going forward, but added that deflationary pressure is not as intense as in Europe. T...

Loading Headlines...
 

Stock Market

Track the stock market today with the latest news and information on all things investing! Watch your stocks perform throughout the day and watch the breaking stock market news.

Feedback | disclaimer | privacy policy

Stock Market News

The Stock Market is ever changing. Keep up on your stock market news.

Stock Market Newsletters

Read up on your favorite stock market newsletters.


Learn the Stock Market

Sharper your stock trading skills with our stock market education section.

Algorithm Based
Trade Signals
arrow
small cap swing trades SmallCaps stocks under $10
Index Signals Index Signals SPY, QQQ, DIA, IWM
options trading Mega Stocks options + stock trade signals
AppleStock FREE AAPL Signals realtime daytrade signals