Daily Gold & Silver Market Report – 5/21/2015
Marcey Hollon
5/21/2015 12:15:00 PM
GOLD STEADY AS DOLLAR FALLS; WEAK EUROZONE SPURS U.S.-DRIVEN REBOUND
Minutes from April’s Federal Reserve policy meeting point to the unlikelihood of the central bank raising interest rates in June as policymakers believer it would be premature. Gold is holding steady as the dollar fell on the news. “Gold will benefit from the Fed's decision to postpone its rate hike and the bar for Gold's support level looks to be raised from here,” Phillip Futures analyst Howie Lee said. “If Gold manages to break above $1,220 [per ounce] decisively, we think a sustained rally in prices would probably materialize.” The uncertainty of a U.S. interest rate increase has Gold somewhat range bound between $1,170-$1,230 per ounce.
Just two months after the European Central Bank launched its 1 trillion euro stimulus program, growth in the currency has weakened. The weaker euro along with slowing factory activity in Asia’s top two economies has placed responsibility on the U.S. to spur global growth. Yet any hopes of a June interest rate hike has been pushed back as the world’s largest economy showed slow growth to start the new year. "There is no question the ECB is going to continue with quantitative easing up until September 2016. China is just starting the amount of additional liquidity and stimulus that will be needed to safely rebalance the economy,” TD Securities head of global strategy Richard Kelly said.
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