Dealing Desk: FOMC Boosts Precious Metal Prices

This week, clients have been net buying gold, silver, and palladium.

Wednesday’s FOMC release seemed to spark more buying acitivity from our clients as they took advantage of the lower pricing in advance of the FOMC statement. Clients have also been net selling their platinum positions to take advantage of the current platinum price which has risen to over USD1,030/oz this week.

GoldMoney’s clients have been in favour of the Hong Kong, Swiss, and Singapore vaults this week with more or less preference being shown toward the London and Canadian vaults.

Kelly-Ann Kearsey, Dealing Manager at GoldMoney said that throughout the week the gold prices have been regaining their losses from last Friday, where a low of roughly $1,230/oz was seen. Silver has remained relatively stable to start the week, sitting at around USD17.00/oz.

The market has been watching for the FOMC statement which was released on Wednesday evening. In the last update, they confirmed that rate decision was to remain unchanged as was expected. They have now dropped comments of concern for the surrounding global outlook and remained confident of the labour markets but did also acknowledge that economic growth seemed to have slowed. They will continue to monitor as inflation is still below the 2% target.

After the comments released by the FOMC, gold made a quick recovery as it moved back towards USD1,250/oz moving into USD1,260/oz throughout Thursday. Silver also received support as it jumped to its highest in almost 1 year as it was boosted to roughly USD17.30/oz which has then increased to a spot high of USD 17.45/oz throughout the day.

The US dollar was also affected as it drifted lower against major currencies which also provided more support for the gold pricing. US data for pending home sales also had no impact in strengthening the US Dollar. The Dollar was then seen losing more than 2% against the Yen, as the markets were surprised by the Bank of Japan keeping its monetary policy steady.

28/04/16 16:00. Gold gained 0.5% to $1,256.11, Silver jumped 1.6% to $17.33, Platinum increased 0.9% to $1,033.74 and Palladium gained 2.1% to $616.00 Gold/Silver ratio: 72

Notes to editor
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