Gold Prices Heads for Weekly Gains on Less Hawkish Fed, Shutdown Worries

Gold Prices Heads for Weekly Gains on Less Hawkish Fed, Shutdown Worries  | Jan 11, 2019 15:23

Gold Prices Heads for Weekly Gains on Less Hawkish Fed, Shutdown Worries - Gold prices pressed higher on Friday, on track for its fourth week of gains, as a less hawkish Federal Reserve and concern over the partial U.S. government shutdown supported demand for the precious metal.

At 10:15 AM ET (15:15 GMT), gold futures for February delivery on the Comex division of the New York Mercantile Exchange inched up $1.70, or 0.13%, to $1,289.10 a troy ounce.

Fed chairman Jerome Powell reiterated on Thursday that the central bank could afford to be patient on monetary policy, and downplayed suggestions that interest rates would be hiked twice more in 2019.

Fed vice chairman Richard Clarida echoed this idea on Thursday. “We can afford to be patient about assessing how to adjust our policy stance,” he said. This is in part because "we begin the year as close to our assigned objectives as we have in a very long time," he added.

Fed officials have recently been pushing the idea that they may well be ready to take a break from policy tightening.

Despite the fact that the Fed predicted two rate hikes in 2019, markets have essentially ruled out the possibility of a hike by the end of this year, placing the odds at just under 14%, while bets for a cut in December are at around 6%.

Gold prices are highly sensitive to rising interest rates, which lift the opportunity cost of holding non-yielding bullion.

The partial U.S. government shutdown also lifted demand for the safe haven asset as it entered its 21st day.

Friday marked the first day that the political impasse over funding for the southern border wall with Mexico officially took its toll on the pocketbooks of U.S public workers.

Paychecks, scheduled for release Friday under normal circumstances, are on hold for some 800,000 federal employees that were forced to go on unpaid leave or work without pay since Dec. 22 because of the government shutdown. Most of those workers were paid on Dec. 28 in the final two-week pay period of 2018.

With the shutdown on track to become the longest in U.S. history, traders began to worry of the negative domestic impact from a prolonged outage, spurring demand for gold.

In other metals trading, silver futures dipped 0.05% at $15.635 a troy ounce by 10:16 AM ET (15:16 GMT).

Palladium futures advanced 0.64% to $1,281.40 an ounce, while sister metal platinum dropped 0.78% at $819.65.

In base metals, copper edged forward 0.13% to $2.641 a pound.

Related News

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (USA) English (India) English (Canada) English (Australia) English (South Africa) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 中文 香港 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
Saving Changes