Gold nears $1,350/oz, dollar weakness aids entire complex

Gold futures climbed to a multi-week high Thursday in the US, with the Federal Reserve’s latest decision to keep rates accommodative leading to a broad-based commodities recovery.

Gold for December settlement on the Comex division of the New York Mercantile Exchange was last up $13.0 or one percent to $1,344.40 per ounce. Trade has ranged from $1,335.10 to $1,347.80.

Chairwoman Janet Yellen said in her post-meeting press conference that the case for a rate increase had strengthened over the previous weeks, but wanted to see more progress. The dollar subsequently erased Friday’s uptick and continued lower today – the dollar index was last at a one-week low of 95.34

“In the end there were no surprises from the FOMC meeting with rates left unchanged. LME metals precious metals and oil all benefitted from the resulting weakness in the dollar and stock markets continued to march higher,” Sucden Financial said.

Currently, only 12.4 percent of market participants foresee a rate increase at the FOMC’s November meeting, while the majority – roughly 50 percent – anticipate the Fed moving in December, according to the CME Group FedWatch tool.

Nevertheless, three FOMC members – Esther George, Loretta Mester and Eric Rosengren – dissented from the statement, an unusually large number, which indicates that policy board is split.

In paper holdings, exchange-traded-funds (ETF’s) tracked by FastMarkets grew 5.7 tonnes overnight. It’s another indication that investors are optimistic on gold’s prospects moving forward.

The pace of economic data picks up today. US weekly unemployment claims for September 8-15 at 252,000 were below the forecast of 261,000

Existing home sales in August came in at 5.33 million, below the economic consensus of 5.45 million. CB leading index month-over-month in August dipped to -0.2 percent, while the estimate expected no change.

Lastly, HPI month-over-month in July rose to 0.5 percent, besting the projection of 0.3 percent.

Turning to US markets, the Dow Jones industrial average and S&P were each up 0.6 percent, while the dollar softened 0.4 percent to $1.1228 against the euro.

As for other precious metals, Comex silver for December delivery gained 32.7 cents or 1.6 percent to $20.095 per ounce. Trade has ranged from $19.785 to $20.145.

Platinum for October settlement jumped $14.40 or 1.4 percent to $1,062.30 per ounce, while the most active palladium contract stood at $698.75 per ounce, up $14.85.

(Editing by Tom Jennemann)

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