Daily Gold & Silver Market Report - 6/18/2015

Marcey Hollon

6/18/2015 11:34:00 AM

GOLD GAINS AS FED STAYS CAUTIOUS; YELLEN STRIKES LESS CERTAIN TONE

Precious Metals prices rallied Thursday on news the Federal Reserve may increase interest rates more slowly than expected, with Gold breaking $1,200 per ounce and Silver hitting a two-week high. Policymakers said a rate hike would only be appropriate after further strengthening of the labor market. “This is all about the Fed and the lower rate hike projections,” Saxo Bank analyst Ole Hansen said. “It's not just a Gold move as both Silver and Platinum have kept up with the pace of the rally since yesterday. (The Fed was) a bit more dovish than the market had expected considering the improvement in economic data since the last meeting. Two quarter-percentage-point hikes before the end of the year could easily become just one if Greek worries, a strong dollar and low inflation outlook continue.” German Chancellor Angela Merkel said there is a possibility for Greece to reach an agreement with its creditors, however, the head of the eurozone finance ministers remains pessimistic about any quick deal.

Normally like-minded policymakers are divided as some favor two interest rate hikes this year while others are leaning toward only one. Fed Chair Janet Yellen may be on the side of a single rate hike, which may keep the Fed from moving until later in the year. “While we cannot be certain, our best guess is that Fed Chair Yellen now anticipates only one increase this year - an important shift in the committee’s center of gravity,” Goldman Sachs economists Jan Hatzius and Zach Pandl wrote in a note to clients. HSBC Securities chief U.S. economist Kevin Logan said, “If Yellen is in the one-hike camp, she is the decider, and the other governors will likely vote in deference to the chair.” Those in favor of a rate increase this year will look for a continuation of strong economic data.

 

At 12:32 P.M. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,203.10 Up $23.40
• Silver, $16.28 Up $0.23
• Platinum, $1,082.80 Up $9.10
• Palladium, $720.90 Down $1.50

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