Los Angeles CA, February 1 (Tangible Investments) — by James O’Dell — Precious metals prices were mixed on Thursday as Gold dips slightly after FOMC statement. Gold is down 0.30 percent to $1,341.00 an ounce after gaining $6.90 on Wednesday to close at $1,345.00 an ounce.
Silver is down 1.27 percent to $17.09 an ounce after adding $0.21 on Wednesday to close at $17.31 an ounce. The Gold/Silver ratio fell to 77.70 as Silver outperformed Gold. Platinum is up 0.20 percent to $1,002.00 an ounce. Palladium is down 0.20 percent to $1,021.00 an ounce.
Gold dipped slightly in early trading on Thursday after policymakers at Wednesday’s FOMC meeting said monetary policy would remain acommodative. The Committee decided that the target range for the federal funds rate would remain at 1-1/4 to 1‑1/2 percent.
The Committee said that it expects economic conditions will warrant further “gradual increases” in the federal funds rate. According to analysts, Gold should continue to outperform the dollar even after the Fed’s somewhat hawkish policy statement.
“While further losses could be witnessed in the short term, a vulnerable U.S. dollar is likely to cushion the yellow metal’s downside,” said Lukman Otunuga, research analyst at FXTM. “From a technical perspective, Gold remains in the process of creating a new higher low,” added Otunuga.
Gold Is The Perfect Defensive Play
“The U.S. Federal Reserve is likely to raise interest rates only slowly and conservatively and be disinclined to get ‘ahead of the curve’ despite the U.S. economy growing at full steam and signs of rising inflation beginning to emerge, partly as a result of a weak dollar,” said Mitsubishi analyst Jonathan Butler.
There are a number of risks surrounding the global economy that make Gold the perfect “defensive play” of 2018, says Butler.
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