Daily Gold & Silver Market Report – 1/29/2015

Marcey Hollon

1/29/2015 12:45:29 PM

GOLD FALLS AS FED OUTLOOK BOOSTS DOLLAR; U.S. HOME SALES DOWN

The U.S. Federal Reserve said in Wednesday’s policy statement the economy was expanding “at a solid pace,” but reiterated it would be “patient” when deciding to increase benchmark borrowing costs from zero. “There was a chance that the [European Central Bank] and the Fed would restore order and that's basically what happened, that the ECB QE (quantitative easing) was just about the right pitch and then the Fed last night was certainly hawkish relative to expectations,” Macquarie analyst Matthew Turner said. Since the 2008 credit crisis, Gold received a boost from increased central bank liquidity and lower interest rates, but the prospect of higher U.S. rates could encourage withdrawal from the metal. The U.S. gross domestic product data expected Friday has investors watching for more clues as to the strength of the U.S. economy.

Tighter inventory and increased house prices discouraged buyers, leading to lower than expected U.S. homes sales in December. The National Association of Realtors’ pending home sales index showed a decrease by 3.7 percent compared to November contract signings. U.S. home sales crept along throughout 2014, however a strengthening economy, declining mortgage rates and easing of lending standards have boosted optimism for coming months. Contracts were up by 6.1 percent compared to December 2013.

At 1:45 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,258.50  Down $30.70
• Silver, $16.91 Down $1.24
• Platinum, $1,218.70 Down $39.80
• Palladium, $770.50 Down $26.80

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