Gold prices stabilized after sharp fluctuations earlier in the course of trading, entrenched near the opening level. In the course of trading influence a weakening dollar and uncertainty about the prospects for the oil market after the failure of the meeting, oil-producing countries in Doha.
“Oil prices have dropped from four to five percent, pulling down shares of a Against this background, there are some safe haven buying.” – Said Citi strategist David Wilson.
Meanwhile, the market is sufficient concerns about the timing of the US Federal Reserve raising interest rates to support the further growth of gold prices. After the first in nearly ten years the rate increase in December, the Fed downgraded on the pace of further growth rates, indicating that downside risks to the global economy may be more serious than expected. Recall, higher interest rates have a downward pressure on the price of gold, which brings its holders to interest income and that is difficult to compete with the assets, bringing that income against the background of increasing interest rates.
“Gold prices are likely to remain close to the level of $ 1,260 in the second quarter in anticipation of Fed rate increase that may occur in July,” – said analyst Bernard Dahdah Natixis. Fed futures rates suggest only one rate increase this year, but recent upbeat economic data and hawkish comments from Federal Reserve officials have forced investors to reconsider forecasts. Meanwhile, on Friday the head of the Chicago Fed Evans said the Fed is unlikely to raise rates this month, but during the rest of the year the rate may be increased at least twice.
Gold reserves in the largest gold ETF-fund SPDR Gold Trust rose Friday to 5.64 tons to 812.46 tons, registering the first increase in a week.
Meanwhile, data from the Commodity Futures Trading Commission showed that hedge funds and money managers raised their bullish bets on gold for a week to 12 April.
The cost of the June gold futures on the COMEX today rose by $ 1.5 to $ 1236.0 per ounce.
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