Gold up ahead of Fed minutes release

GoldMoney (Other OTC: BTGDF – news) dealing manager Kelly-Ann Kearsey said: “The US Federal Reserve’s caution with regard to when it might put up interest rates has hit the dollar this week, and that combined with the continued economic woes in China has pushed investors towards the safe haven of gold in particular.”We know that whenever we see a boost in the gold price customers tend to start taking more interest in the metal again and look to buy in as part of the upward trend”.

The most active gold contract for December delivery rose $11, or 0.98 percent, to settle at $1,127.90 per ounce on Wednesday, Xinhua reported. The dismal reading dragged down global stocks and also weighed on the commodity markets.

Turning to the US, the Dow Jones industrial average and S&P were each down 2.1 percent, while the dollar was 0.6 percent softer $1.1305 against the euro.

“Those who began singing the swan song for gold around four weeks ago are doubtless rubbing their eyes in amazement now”, Commerzbank said.

It would appear that the yellow precious metal is not quite so useless after all when things get turbulent on the markets.

In China, Caixin – previously HSBC – flash manufacturing PMI undershot expectations at 47.1 – below the 50 contraction level.

In news, rancorous disputes in Greece over an additional bailout and further austerity measures has forced Greek Prime Minister Alexis Tsipras to resign as he called for a snap election next month. “The Chinese economic data release today has also helped the metal, as this presages more headwinds for the Fed“. Spot silver was down 1.2 per cent at $US15.378 an ounce after hitting a five-week high earlier in the session at $US15.660 an ounce.

However, there was some hope left for investors, as cash copper traded at a premium of $6 a tonne to the three-month rate on the LME – its highest since May – suggesting near-term supply is getting increasingly harder to come by.

October platinum fell 0.8% to $1,027.10 an ounce, up 3.3% on the week, while September palladium shed $18.80, or 3%, to $604.45 an ounce, losing 2.1% for the week.