SMM News: COMEX futures rose for the ninth day in a row on Wednesday, closing at a new high. The Federal Open Market Committee (FOMC) reiterated its plan to keep interest rates near zero until the economy improves further and gold prices rise further in after-hours trading.
In a statement issued after the two-day meeting, the Fed noted that economic activity and employment had "rebounded in recent months" and renewed its commitment to use various tools to support further economic improvement.
"after a sharp decline, economic activity and employment have rebounded in recent months, but they are still well below the level at the beginning of the year," the Fed statement said. "the path of economic development depends to a large extent on the evolution of the epidemic."
"the Fed has no unexpected results, basically telling the market that everything will be business as usual in the future," said BrienLundin, editor of GoldNewsletter.
"as a result, uncertainties were ruled out and gold reacted well and resumed its rally."
Against this backdrop, gold continued its upward trend shortly after the Fed's announcement.
Comex August gold futures closed 0.5 percent higher, or $8.80, at 13:30 in New York time, settling at $1953.40 an ounce. This is the ninth day in a row that the price of gold has risen, and it is the longest straight rise since the 10th consecutive rise in January.
"the recent surge in novel coronavirus cases has prompted the government to re-impose restrictions," said SanjeebanSarkar, a commodity editor at TheEconomistIntelligenceUnit. The number of first-time claims for unemployment benefits has exceeded 1 million.
"these factors indicate a good outlook for the precious metals market," he said, and spot gold prices will continue to rise. Low interest rates stimulate gold purchases. However, because there is nothing the Fed can do at the moment, "the decision to keep interest rates unchanged has been largely digested."
The dollar continued to fall against other currencies after the Fed's statement, providing further support for dollar-denominated gold.
Investors continue to pour into the gold-backed exchange-traded fund (ETF), SPDRGoldTrustGLD, whose holdings hit their highest level in more than seven years.
Meanwhile, Comex September silver futures rose 2. 1 cents to $24.321 an ounce. Silver closed at its highest level since April 2013 on Monday and is up about 25 per cent so far this year.
JordanEliseo, manager of listed products and investment research at Perth Mint (PerthMint), said silver's rise "has many of the same reasons as gold, because they are precious metals and people seek refuge in times of economic instability and financial market turmoil".
"unlike gold, which is seen more as a monetary metal by the market, silver is also widely used in industry, which is one of the reasons why price fluctuations, whether upside or downside, tend to be more volatile than gold itself," he said. "
Looking ahead, Eliseo said: "there is no guarantee that history will repeat itself, but more and more investors are adjusting their portfolios in the hope that silver will outperform gold in the coming years, as it has done in the past three months."
For other precious metals, October platinum futures fell $27.70 to settle at $958.5 an ounce.
September palladium futures fell $104.30 to settle at $2261.20 an ounce.
In addition, COMEX9 copper for monthly delivery closed 15 cents higher at $2.9190 a pound.
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