Gold Remains Underpinned After Fed Rate Hike

Allen Sykora

 Thursday March 16, 2017 09:26

Gold has moved back above some key technical-chart points in the rally since the Federal Reserve was not seen as overly hawkish in commentary Wednesday despite upping U.S. interest rates. As of 9:12 a.m. EDT, spot gold was up $11.75 to $1,230.80 an ounce, climbing to the highest level since March 6. “Gold broke through a number of Fibonacci retracement levels around $1,210 and the 50 DMA (50-day moving average) at $1,218 to end the (Wednesday) session 1.3% higher,” with more than 150,000 ounces of inflows into global exchange-traded funds, says Sam Laughlin, senior precious-metals trader with MKS (Switzerland) S.A. The metal has remained bid on Thursday, report Laughlin and Commerzbank. “As expected, the U.S. Federal Reserve raised interest rates by 25 basis points. However, it gave no indication beyond this step that it might hike interest rates more quickly in future than previously signaled,” Commerzbank says. “Fed Chair (Janet) Yellen envisages a total of three rate hikes in 2017, followed by another three in 2018. The U.S. dollar and yields on 10-year U.S. Treasuries fell significantly in response, which helped drive the gold price up.” The bank adds that global gold ETF inflows were 4.7 tonnes Wednesday.