BS: Spot gold climbs to highest in more than a week
Spot gold hit its highest in more than a week today as the dollar slipped after the US Federal Reserve pledged to keep interest rates near zero for an “extended period”.
The precious metal (XAU=) hit a session high of $1132,65 a troy ounce, its highest since March 8.
“The dollar connection is stronger, gold is up on that,” a Europe-based trader said. “Looks like nothing is going to change for a while on the monetary policy front in the US”
A weaker US currency (.DXY) makes dollar-based metals cheaper for holders of other currencies. [USD/]
The US central bank’s nod to a firmer jobs market after the deepest recession in decades offered a hint it may be moving closer to dropping its promise to hold borrowing costs at rock bottom levels.
“We regard the FOMC statement as supportive for bullion, but not a surprise,” HSBC said in a note.
“The decline in US Treasury yields, with the yield on the 10-year government bond falling to 3,65% from 3,70% the previous day confirmed easy monetary policies and helped gold rally.”
Spot platinum touched $1636 an ounce, its highest since January 20.
“Platinum and, to a lesser degree, palladium were supported by comments from Eskom, South Africa’s state utility that power supply could become a serious concern from 2011 onwards until new power stations come onstream,” HSBC said.
