Gold prices fell near 1-week lows Wednesday in London, dipping beneath $1240 per ounce as US traders joined the session after Donald Trump’s first speech to Congress about his fiscal plans was overshadowed by 5 senior Federal Reserve officials surprising the markets with a seemingly co-ordinated announcement that Dollar interest rates are set to rise at this month’s central bank meeting in 2 weeks’ time.
Annual US inflation on the PCE Price Index then came in at 1.9% for January on official data today, the fastest pace since October 2012.
Knocking the Euro down 1.5 cents from yesterday’s 2-week highs, the Dollar rose fastest against the Japanese Yen, hitting 3-week highs.
That pushed the gold price in Yen up towards new 12-month highs 4550 per gram, some 10% above last October’s retreat to 9-month lows, just before the election of Donald Trump as US president.
Betting on Comex Fed futures contracts jumped this morning to price a March hike as a 69% likelihood, up from 35% at Tuesday’s close according to the CME’s FedWatch tool.
This post was published at FinancialSense on 03/01/2017.
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