Dealing Desk: Central Banks give Precious Metals a BoostSep 22, 2016·Kelly-Ann Kearsey
This week, clients have been net buying gold, silver, and platinum, speculating the market by taking advantage of the lower prices during the Fed Meeting on Tuesday and Wednesday.
Goldmoney Wealth’s clients have favoured the Swiss and Singapore vaults followed by the London vault this week, with less preference being shown for the Hong Kong and Canadian vaults.
Kelly-Ann Kearsey, Dealing Manager at Goldmoney Wealth said that this week gold and silver had been trading sideways, remaining within range as the markets awaited announcements from two of the largest central banks with regards to their monetary policies. On release of the Fed Statement from Wednesday evening (BST), gold jumped to a spot price high of $1,336.00/oz whereas silver also reached a spot high of 19.87/oz. Silver has then continued to increase throughout Thursday and could look to challenge the $20.00/oz level again.
The Bank of Japan announced on Wednesday that it would target interest rates on government bonds in order to achieve the inflation target but has also reassured the markets that it would continue to buy large amounts of bonds and riskier assets.
The weak reports from today could encourage the FOMC to keep their rates unchanged.
Following this the US Federal Reserve concluding its two-day meeting on Wednesday afternoon with the result that interest rates would be left unchanged as expected. However, it has signaled that it could still tighten the monetary policy by the end of the year. Janet Yellen stated that ‘U.S. growth was looking stronger and rate increases would be needed to keep the economy from overheating and fueling high inflation’. Yellen also noted that she would expect one rate increase this year if the job market continued to improve and no new major risks were to arise.
The Fed has policy meetings set for early November; however, there is some suggestion that it may avoid hiking at this point in time as the meeting is expected just days prior to the US presidential elections.
Week on week, palladium was the best performer after a gain of 1.2% followed closely by silver. This has amended the gold to silver ratio down to 67.
22/09/16 16:00. Gold increased 0.6% to $1,336.96, Silver jumped 1.0% to $19.95, Platinum rose -2.8% to $1,057.00 and Palladium added 1.2% to $694.40 Gold/Silver ratio: 67
NOTES TO EDITOR
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