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Gold Climbs as Dollar Fades ahead of Fed Rate View
 

Gold

Gold edged higher on Tuesday as the dollar drifted ahead of a U.S. Federal Reserve monetary policy meeting. An expected Federal Reserve rate rise was mostly priced in by traders, who will be looking for clues on the future pace of rate hikes from the central bank. "Upside scenarios for gold need the Fed sound a bit more dovish, but there's not a lot of room for that at the moment in view of strong U.S. economic data .

U.S. consumer confidence surged to an 18-year high in September as households grew more upbeat about the labor market. The Conference Board said its consumer confidence index increased to a reading of 138.4 this month. That was the best reading since September 2000 and the index is not too far from an all-time high of 144.7 reached that year. Upbeat consumer confidence will underpin the strength of the U.S. dollar, imposing more pressure on bullion.

On chart, gold has been lingering around $1,200 for a month, seeking more clues for direction. The MACD index suggests that an upside appears on the radar if current situations continue.

Silver

Silver gained 1.6 percent at $14.45 an ounce, earlier reaching $14.56, its highest since Aug. 31. Prices remained low, dampened by risk appetite, and did not track gold in the latter’s upswing. We maintain our view that a rally in gold prices will push up silver prices at a faster pace.

 

Dealing Room, ICBC Beijing Branch
                       Cheng Yu


(2018-09-26)
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