Daily Gold & Silver Market Report – 5/20/2015

Brandi Brundidge

5/20/2015 12:54:36 PM

GOLD REMAINS FLAT; VIEWS ON FED’S PLAN TO HIKE INTEREST RATES

Gold slowly moved up Wednesday after seeing its biggest one-day loss since April 30 on a strong U.S. dollar Tuesday.  “The dollar and the euro seem to be the direction setters,” Precious Metals trader MKS SA head of trading Afshin Nabavi said. “This morning Gold looked like it was going to break below $1,200 [per ounce], but held well, though it cannot really rally. It feels like $1,200-$1,215 (is the range) for the short term.” Until recently, Gold resisted the $1,200 an ounce level, hamstrung by the expectation the Federal Reserve might increase interest rates, which could weigh on non-yielding bullion. Gold and Silver have found support from weaker-than-expected U.S. economic data and the anticipation the Fed will postpone an interest rate hike. 

There are various opinions on how the Fed should move forward with increasing interest rates. Nuveen Asset Management chief equity strategist Bob Doll told CNBC's "Squawk on the Street," “I think they want to get on with it [and] they need to get on with it. The economy justifies low Fed funds rate, not zero. Zero connotes an emergency, and the emergency has passed. I think they will find every excuse to move.”  On the other hand, Chicago Fed President Charles Evans, a Federal Open Market Committee (FOMC) voting member, believes they should wait until early 2016, saying.  “Inflation is too low. The FOMC should refrain from raising the federal funds rate until there is much greater confidence that inflation one or two years ahead will be at our 2 percent target.”

At 1:55 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,212.40. Up $2.90
• Silver, $17.21 Up $0.07
• Platinum, $1,158.90 Up $7.00
• Palladium, $779.00 Up $1.90

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