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Silver and Gold Make Gains

May 2, 2018 at 17:43 by Matt Jackson

A slowing in price for the dollar has seen gold prices steady on Wednesday, while silver prices recorded more than 1% in gains for the day.

Tuesday saw the dollar hit its highest rate since the middle of January, pushing gold prices down to near 4-month lows. The uptick in the dollar has seen gold prices take a downturn as gold priced in dollars becomes more expensive for international traders. Gold is also seen as a safe haven away from the dollar, with prices inversely reacting to the currency’s performance.

The slowdown in dollar prices has been attributed to the market waiting for the latest Federal Reserve monetary policy release, which is due at 14:00 ET (19:00 GMT). Analysts expect policy makers to continue holding interest rates at their current level. However, the expenditure price index rose 2%, hitting its annual target and causing some concern that the Federal Reserve might increase rates faster than expected. This would almost certainly cause gold prices to turn down during after-hours trading. Gold has risen 0.05% to $1,305.60 per ounce.

Silver enjoys greater price volatility compared to gold. It enjoyed a bullish start to April before the dollar’s rise brought it back down to earth again. So far this year, the metal has been trading between $16 and $17.70 per ounce. The rise of the dollar has seen silver price slip down close to $16, but a 1.04% increase means that it has now reached $16.39 an ounce on Wednesday’s trading.

The Federal Reserve’s announcement could have a major impact on the dollar and, in turn, on the price of silver and gold, as the market listens for any hint of a more aggressive interest rate policy later in the year.

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

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