Gold Prices See Mild Uptick in Wake of FOMC Statement

By Paul Ploumis 18 Jun 2015 Last updated at 03:56:42 GMT

(Kitco News) - Gold prices are modestly higher in afternoon U.S. trading Wednesday, in the wake of the just-released FOMC statement that contained no significant surprises. However, the U.S. dollar index did weaken following the FOMC statement, which gave the gold and silver markets a mild boost. The presently bearish near-term technical postures for gold and silver are still keeping many buyers on the sidelines. August Comex gold was last up $2.20 at $1,183.20 an ounce. July Comex silver was last up $0.095 at $16.06 an ounce.

The Federal Reserve’s Open Market Committee (FOMC) statement said U.S. economic growth is improving but gave no specifics on the timing of any U.S. interest rate hike. Market participants were awaiting a press conference from Fed Chair Janet Yellen. She could provide some fresh fodder for which markets could react--such as commenting on Greece, the timing of the next U.S. rate hike, or on U.S. inflation prospects. Most market watchers did not expect the FOMC to raise interest rates today, but instead do so in September or later.

European stock markets were lower again Wednesday amid worries about Greece defaulting on its debt obligations to the European Union and International Monetary Fund. The European Central Bank on Wednesday authorized more emergency loan money to Greece. Greece-EU debt negotiations broke down Sunday. Greece’s prime minister is now talking a hard line against the EU and IMF, which makes the situation even more dire. Greece’s central bank on Wednesday warned of an "uncontrollable crisis” if the debt talks ultimately fail. Greek bond yields have this week pushed above 29% for the two-year note. The market place is realizing Greece will probably default on its debt payments. This means when the event actually occurs, markets price action will probably not be too volatile because the event will have already been factored in to markets’ price structures.

The London P.M. fix is $1,178.00 versus the previous A.M. fixing of $1,178.50.

Courtesy: Kitco News