Safe Haven Demand Continues To Support Gold

Safe Haven Demand Continues To Support Gold

Safe Haven Demand Continues To Support GoldLos Angeles CA, July 26 (Tangible Investments) — by James O’Dell — Precious metals prices were mixed in early trading on Wednesday as safe haven demand continues to support Gold. The yellow metal is down 0.18 percent to $1,247.30 an ounce after sliding $5.10 on Tuesday to close at $1,249.60 an ounce.

Silver is down 0.27 percent to $16.43 an ounce after trading flat on Tuesday at $16.47 an ounce. The Gold/Silver ratio fell to 75.87. Platinum is down 0.43 percent to $921.00 an ounce. Palladium is up 0.12 percent to $856.00 an ounce.

Gold dipped below both 50 and 100-day moving averages in early trading Wednesday as the dollar firmed and equities rose.

“Stronger U.S. economic data has also weighed on Gold, but has been negated by the weak inflation outlook,” said analyst Daniel Hynes, of ANZ. “Assuming that we don’t see any sort of change in language from the Fed meeting, I suspect we’ll see safe haven demand pushing Gold prices up.”

Investors remain focused on the Federal Open Market Committee (FOMC) meeting, which concludes later today, for insights into future moves. “Markets are certainly a little bit cautious ahead of the Fed meeting and that’s probably hindering investor appetite,” said Hynes. “I think the market will be looking for any comments around inflation.”

Fed Expected To Keep Rates Steady

Economists expect the Fed to keep interest rates unchanged and according to CME there is just a 50 percent chance of a rate hike by year-end. “The technical break during Asian trade today saw some participants heading for the exits as we near the FOMC rates announcement and it is difficult to see Gold making any headway above $1,250 leading into the Fed,” said MKS in a note.

“A hawkish tone from Yellen today will open up a test toward the 200 day moving average $1,229, while a dovish skew is likely to see a recovery test (at between) $1,258 – $1,262.”

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