Gold raced through another resistance level as the dollar continued to weaken after last night’s minutes of the US Federal Reserve.
Spot gold was US$15 ahead at US$1,153 as the Fed expressed concern about outside influences on the US economy such as China and low inflation.
Many economists have now pushed their forecast of when interest rates may start to rise back to March 2016, which would be more than a year on from when monetary tightening was tipped to start by some.
Added to the weak non-farm payroll number last week, traders said there is scope for gold’s recent run to extend further with charts suggesting the next resistance level is US$1,170.
Gold has been under the cosh for months on expectations on interest rates in the US would start to go up.
The metal traditionally moves in the opposite direction to the dollar and US Treasuries, both of which are driven by interest rates, but the mood has shifted a little and this week’s gains have come in spite of little or no pick up in physical demand, especially in India where festival season so far has been muted.
According to HSBC, it will stay that way as it believes domestic stocks are high and if there is an upturn it may not be sufficient to offset lower demand from China, the other major consumer market.
Reports from India suggest gold is trading at discounts of between US$7-8 to the spot price, while premiums in China are also dropping.
Silver was a few cents higher at US$15.75, while platinum added US$26 to US$972.
