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Gold, Silver Prices Extend Gains as Fed Leaves Rates Unchanged

September 22, 2016 at 17:25 by Andrew Moran

Gold and silver prices are extending their gains on Thursday. The precious metals are soaring after the Federal Reserve announced that it would leave interest rates unchanged. Bullion prices have the opportunity now to make some more gains until December, when the US central bank has hinted at raising rates.

December gold futures climbed $13.70, or 1.03%, to $1,345.10 per ounce at 17:01 GMT on Thursday. Gold spiked on Wednesday by more than $16 as the go-slow approach by the Fed is helping boost the yellow metal. Gold prices have been in a slump for the past several trading sessions because the market had expected a rate hike.

Silver is also making considerable gains. December silver futures rose $0.32, or 1.65%, to $20.09. This is the first time silver has crossed the important $20 threshold since September 6.

Year-to-date, gold has soared 24%, while silver has skyrocketed more than 40%.

Precious metals usually attract buyers in a low-rate climate as rising rates reduce the allure of non-yielding investments, such as gold and silver, among investors.

The Federal Open Market Committee (FOMC) concluded its much anticipated two-day policy meeting on Wednesday. Fed Chair Janet Yellen confirmed that interest rates would stay put at 0.25% to 0.50%. She noted that this does not mean the central bank is bearish on the national economy. Instead, Yellen noted that the Fed will wait for further evidence that it is meeting its key objectives. The Fed is now hinting at a December rate hike.

The FOMC will hold two more monetary policy meetings this year: November 1 and 2 and December 13 and 14.

With the September Fed decision out of the way, investors will now concentrate on the US presidential election. The November contest between Donald Trump and Hillary Clinton will provide a lot of market uncertainty over the next several weeks, which is bullish for gold.

If you have any questions and comments on the commodities today, use the form below to reply.

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