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Last Updated : Aug 20, 2015 12:52 PM IST | Source:

Gold surges to 5-week high on delayed Fed rate hike bets

Gold surges to 5-week high on delayed Fed rate hike bets - - Gold prices rallied to a five-week high on Thursday, after the minutes of the Federal Reserve's July meeting fanned hopes that the central bank could delay raising interest rates till the very end of 2015.

Gold futures for December delivery on the Comex division of the New York Mercantile Exchange rose to an intraday peak of $1,141.80 a troy ounce, the strongest level since July 17, before trading at $1,137.70 during European morning hours, up $9.80, or 0.87%.

A day earlier, gold climbed $11.00, or 0.98%, to close at $1,127.90 after prospects for a rate hike in September by the Federal Reserve appeared dim after the release of July meeting minutes.


The minutes showed Fed officials continued to express broad concerns about lagging inflation and the weak global economy.

The minutes added that policymakers were concerned about "recent decreases in oil prices and the possibility of adverse spillovers from slower economic growth in China."

The US dollar index, which tracks the greenback against a basket of six major rivals, was at 96.50 early Thursday, little changed on the day after falling sharply on Wednesday.

Traders now looked ahead to U.S. data later in the session for further indications on the strength of the economy and the timing of an interest rate hike.

The U.S. is set to release data on initial jobless claims, existing home sales and manufacturing activity in the Philadelphia region later Thursday.

Despite a recent batch of upbeat economic data, some traders believe the Fed could postpone raising interest rates next month as officials are likely to remain concerned over global growth and inflation pressures due to China's shock currency devaluation move and weak commodity prices.

Gold fell to a five-and-a-half year low of $1,072.30 on July 24 amid speculation the Fed will raise interest rates in September for the first time since 2006. But prices have since rebounded almost 6% on hopes of a delayed U.S. rate hike.

Elsewhere in metals trading, copper for September delivery on the Comex division of the New York Mercantile Exchange inched down 0.2 cents, or 0.04%, to trade at $2.274 a pound during morning hours in London.

Copper plunged to $2.260 on Wednesday as growing concerns over the health of China's economy and steep declines on Chinese stock markets dampened appetite for the red metal.

The Shanghai Composite took investors on another volatile ride on Thursday, falling by as much as 2% after the open, before paring losses after the midday break, and then plunging again in the last hour of trade to end down 3.4%.

China is the world's largest copper consumer, accounting for almost 40% of world consumption last year.

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First Published on Aug 20, 2015 12:52 pm
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