Dealing Desk: Gold Slips Lower as Fed Rate Hike Expectations IncreaseMar 10, 2017·Rachel Stonier
Federal Reserve Chair Janet Yellen communicated the rate hike would be dependent on the employment and inflation data meeting the Fed’s expectations after the U.S. markets closed last Friday.
Goldmoney Wealth clients have been net selling all precious metals this week, with silver being the most actively traded. Clients have preferred vaults in London, Zurich, Singapore, and Hong Kong, and have shown less preference for the Toronto vault.
While gold and silver started the week at $1,231 and $17.89 respectively, the precious metals weakened as the U.S. Dollar Index rallied and 10-year US Treasury yields climbed with March Fed rate hike expectations.
Federal Reserve Chair Janet Yellen communicated the rate hike would be dependent on the employment and inflation data meeting the Fed’s expectations after the U.S. markets closed last Friday. Initial U.S. data released this week indicated unemployment is at its lowest level since 1973. The ADP employment report showed the U.S. private sector created 298K jobs in February – the most in three years and much higher than the expected 190K, which underscores the continued tightening of the U.S. employment market.
“Gold reacted by falling to a one-month low of $1,206, while silver sank to a five-week low of $17.20,” said Rachel Stonier, dealing manager at Goldmoney Wealth. “Gold had been declining for several days, but silver held its own until sellers showed up and caused damage in about two hours. Silver can move quickly with little warning and it’s now struggling at the prospect of a slower Chinese economy.”
Eurozone inflation accelerated to the fastest pace since January 2013, though the ECB left both the rate decision unchanged and the asset purchase target static at €80 billion on Thursday. The potential fallout from the upcoming French and Dutch elections coupled with continued worldwide uncertainty has quieted the hawks on the ECB’s governing council.
All precious metals fell this week under the looming possibility of a mid-March U.S. Fed rate hike. Silver suffered the biggest loss of 6.6% while platinum dropped by 6%; gold fell by 3% and palladium declined by 2.7%.
09/03/17 16:00 – Gold: $1,203.99; Silver: $17.13; Platinum: $939.68; Palladium: $755.09. Gold/Silver Ratio: 70.29.
NOTES TO EDITOR
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