LOOMING RATE HIKE STILL AFFECTING GOLD
Gold is back up above $1,200 an ounce Friday morning despite uncertainty the Federal Reserve will raise interest rates this year. Since Gold generally works in negative correlation to the U.S. dollar, rising rates would boost the dollar while lifting the opportunity cost of holding non-yielding bullion. “Expectation once again is for rate rises to be pushed out even later. September or October has been our base assumption for some time, but I've heard talk in the last couple of days of rate rises being pushed out to 2016,” Mitsubishi analyst Jonathan Butler said. Spot Gold rose 0.5 percent Friday, while U.S. Gold futures for June delivery rose $4.90 per ounce to $1,202.90.
The expected interest rate is also affecting oil, with gas prices seeing their largest increase since February 2013, rising 3.9 percent. Food prices slipped 0.2 percent last month. March's consumer price gains are likely to strengthen the Fed's view that inflation will move toward their 2 percent target as the dampening effect of lower energy prices fades. Consumers are waiting to see when the rate hike will happen. In the meantime, it will not only affect metals, but oil and food prices as well.
At 9:25 a.m. (ET), the APMEX Precious Metals spot prices were:
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