• Gold prices have lifted 1 per cent to a three-and-a-half-month high after minutes from the latest Federal Reserve policy meeting further dampen expectations for an interest rate rise in March, lowering US bond yields and pressuring the US dollar.
• Gold futures on the COMEX division of the New York Mercantile Exchange rose on Thursday after the release of the Federal Open Market Committee (FOMC) meeting minutes.
• The most active gold contract for March delivery rose 18.1 U.S. dollars, or 1.47 percent, to settle at 1,251.40 dollars per ounce.
• Spot gold was on track for its biggest daily gain since February 6.
• The meeting minutes from the February FOMC are in and investors are seeing hints at a rate hike "fairly soon" which is not as optimistic as they had originally anticipated, given the recent data.
Investors believe the Fed may raise rates from 0.75 to 1.00 during the May FOMC meeting at the earliest. According to the CME Group's Fedwatch tool, the current implied probability of a hike from 0.50 to at least 0.75 is at 22 percent at the March meeting and 52 percent for the May meeting.
• Gold was given extensive support as the U.S. Dollar Index fell by 0.25 percent to 101.07 as of 1805 GMT.
• "The dollar's backed off, bond yields have backed off, and that's given a bit of support for gold," said Robin Bhar at Societe Generale.
• Gold investors should be paying close attention to upcoming European elections," said Walter Pehowich, executive vice president in charge of precious metals investments services for Dillon Gage Metals.
• "This may in hindsight look like a one-day wonder," he said. Investors were looking ahead to an address by US President Donald Trump to Congress on February 28.
More details on promised government spending, infrastructure investment or tax cuts would likely push the dollar and US asset prices higher and gold lower. "Should Trump become the feared 'unguided missile', which we still believe is unlikely, safe-haven demand would increase even more," Julius Baer analyst Carsten Menke said in a note.
• Investors are waiting for the new home sales report due on Friday, and several key economic reports due next week. The durable goods orders report is due Monday, gross domestic product and international trade in goods is due Tuesday, personal income and outlays is due on Wednesday, weekly jobless claims is due on Thursday, and Friday will see several Fed officials giving speeches, including Fed Chair Janet Yellen.
• On a technical note, today’s strong upside rally in gold moved prices well above our identified resistance level at $1242. This resistance level was created using a Fibonacci extension from the onset of this rally, beginning at the end of December of 2016. It culminated with a $100 price advance in mid-January. From mid-January until the beginning of February, gold prices corrected to $1180 per ounce. We are now in the second leg of this rally and based upon our current technical models, it should culminate with gold prices at least at $1280 or higher.
• Silver for March delivery rose 16.7 cents, or 0.93 percent, to close at 18.117 dollars per ounce.
Reference: Xinhua, Kitco, Business News
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