Investors See Gold Rising on Dovishness From FOMC

Investors See Gold Rising on Dovishness From FOMC

$XAU $GLD $XAG $SLV $PLAT

Gold rose Monday after the prior session’s decline, that boosted by hopes of dovish monetary policy from the FOMC Wednesday.

Spot gold rose 0.5% to 1,692.86 oz by 12:23 p ET (1623 GMT)

US gold futures rose 0.9% to 1,698.10 oz

Expect the Fed to continue to continue it dovish policies, and suppress real rates. That is the main driver for gold purchases over the last few months plus macro issues will continue to support gold.

Bullion fell as much as 2.4% to 1,670 Friday, its lowest mark in over a month, after an unexpected rise in US employment increased hopes for a swift recovery in the global economy and boosted investor appetite for riskier assets.

Gold’s uptick was also technical in nature, a the break below 1,700 Friday is once again attracting some demand from investors, who have been waiting on the sidelines for a pullback.

Notably, market participants have stopped pricing in the possibility of negative interest rates after Friday’s NFPs report.

Gold to gains when interest rates are low, which reduces the opportunity cost of holding non-yielding bullion. Gold is also seen as a hedge against inflation.

Holdings in the world’s largest gold-backed ETF, SPDR Gold Trust, (GLD) dipped 0.4% Friday. Speculators cut their Bullish positions in COMEX gold in the week to 2 June.

In other precious metals trading, spot silver advanced 1.0% to 17.54 oz , platinum fell 0.4% to 832.34 oz and palladium jumped 2.4% to 2,000.70.

Have a healthy day, Keep the Faith!

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Paul Ebeling

Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he it the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.