Gold has declined to two-month lows as market participants anticipate a potential hike in the Fed funds rate.
Bullion.Directory precious metals analysis 21 August, 2014
By Christopher Lemieux
Senior FX and Commodities Analyst at FX Analytics
The US dollar continued to strengthen to a six-month high as yesterday’s FOMC minutes gave hints that many US policy makers could be leaning to a more hawkish outlook. Tom Kendall, an analyst for Credit Suisse Group, said “any hint that there’ll be more definitive action coming from the Fed is not going to be bullish for gold.”
Kendall added that the market is still highly reactive to the Fed and its policies.
Futures traders are begining to price in any rate hike expectations.
Futures are indicating that there is a 53.5 percent chance the Fed will increase rates by next July, up from 48.3 percent prior to the FOMC minutes.
Gold is hovering just above $1,381 per toz., down 1.05 percent. Silver is has been retesting recent lows of $19.29 per toz., down .79 percent.
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