Gold and silver prices ended a quiet U.S. day session slightly higher Tuesday. Some mild short covering in the futures markets and bargain hunting in the cash markets were featured, following recent selling pressure. December Comex gold was last up $2.70 an ounce at $1,346.20. December Comex silver was last up $0.072 at $19.07 an ounce.
The highlight of this week will be the Federal Reserve’s annual symposium held in Jackson Hole, Wyoming. Fed Chair Janet Yellen speaks at the event on Friday. Recent comments from Federal Reserve officials have been mixed, but the majority of their recent rhetoric has leaned toward the hawkish side of U.S. monetary policy. There are now increasing ideas in the marketplace that the Fed will raise interest rates yet this year.
Two key releases of data are the true underlying fundamentals driving markets today. Certainly another little upward bump in the price of oil has helped stimulate U.S. equities, but it is the data that really counts.
Upon reconsidering the likelihood of a rate rise, the dollar took back most of its losses on the day. That took the steam out of gold and silver’s strength. The two metals are slightly in the red on the day.
Citi Research modestly increased its forecast for gold prices in the second half, commenting Tuesday that the metal is likely to remain underpinned by political uncertainty and demand from exchange-traded funds even if the Federal Reserve hikes interest rates before year-end.
“We have been bullish bullion prices in our past few notes and make only modest upgrades versus the forwards this month,” Citi said in a research note.
Previously, Citi looked for Comex gold prices to average $1,325 and $1,280 an ounce in the third and fourth quarters, respectively. The bank upgraded these to $1,340 and $1,320.
TD Securities doubts gold prices would fall much below $1,300 an ounce even if Federal Reserve Chair Janet Yellen were to suggest a coming rate hike when she addresses a Jackson Hole Fed symposium on Friday, says TD Securities.
Reference: Kitco
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