April 07, 2016
Gold Gains as Fed Meeting Minutes Confirm Cautious Rates Outlook
(Bloomberg) - Gold rose after minutes from last month’s Federal Reserve meeting showed caution in the setting of U.S. monetary policy, curbing prospects for interest-rate increases and boosting the appeal of the metal.
Bullion for immediate delivery advanced as much as 0.4 percent to $1,227.60 an ounce and traded at $1,226.05 at 11:59 a.m. in Singapore, according to Bloomberg generic pricing.
Gold has rallied in 2016 as slowing global growth clouded the U.S. economic outlook. Minutes of the Federal Open Market Committee’s March 15-16 meeting released Wednesday showed officials debated the strengthening U.S. economy and heightened global risks. With policy makers not rushing to raise rates, gold is benefiting as it becomes more competitive against interest-bearing assets.
The “minutes released last night gave a slight boost to gold as it indicated that in the first half of the year the real GDP is projected to increase” more slowly than expected, Brian Lan, managing director of Singapore-based GoldSilver Central Pte., said by e-mail. “There might still be downside risks for gold as we see increasing scrap flows at the moment and an increasing surplus.”
Bullion of 99.99 percent purity on the Shanghai Gold Exchange fell 0.1 percent to 255.73 yuan a gram ($1,228.26 an ounce).
Holdings in exchange-traded funds backed by gold climbed 5.6 metric tons to 1,762.1 tons on Wednesday, according to data compiled by Bloomberg.
Spot silver rose 0.1 percent, while platinum added 0.2 percent and palladium was little changed.