Dealing Desk: Gold Slips Lower as Fed Rate Hike Expectations Increase

Federal Reserve Chair Janet Yellen communicated the rate hike would be dependent on the employment and inflation data meeting the Fed’s expectations after the U.S. markets closed last Friday.

Goldmoney Wealth clients have been net selling all precious metals this week, with silver being the most actively traded. Clients have preferred vaults in London, Zurich, Singapore, and Hong Kong, and have shown less preference for the Toronto vault.

While gold and silver started the week at $1,231 and $17.89 respectively, the precious metals weakened as the U.S. Dollar Index rallied and 10-year US Treasury yields climbed with March Fed rate hike expectations.

Federal Reserve Chair Janet Yellen communicated the rate hike would be dependent on the employment and inflation data meeting the Fed’s expectations after the U.S. markets closed last Friday. Initial U.S. data released this week indicated unemployment is at its lowest level since 1973. The ADP employment report showed the U.S. private sector created 298K jobs in February – the most in three years and much higher than the expected 190K, which underscores the continued tightening of the U.S. employment market.

“Gold reacted by falling to a one-month low of $1,206, while silver sank to a five-week low of $17.20,” said Rachel Stonier, dealing manager at Goldmoney Wealth. “Gold had been declining for several days, but silver held its own until sellers showed up and caused damage in about two hours. Silver can move quickly with little warning and it’s now struggling at the prospect of a slower Chinese economy.”

Eurozone inflation accelerated to the fastest pace since January 2013, though the ECB left both the rate decision unchanged and the asset purchase target static at €80 billion on Thursday. The potential fallout from the upcoming French and Dutch elections coupled with continued worldwide uncertainty has quieted the hawks on the ECB’s governing council.

All precious metals fell this week under the looming possibility of a mid-March U.S. Fed rate hike. Silver suffered the biggest loss of 6.6% while platinum dropped by 6%; gold fell by 3% and palladium declined by 2.7%.

09/03/17 16:00 – Gold: $1,203.99; Silver: $17.13; Platinum: $939.68; Palladium: $755.09. Gold/Silver Ratio: 70.29.

NOTES TO EDITOR
For more information, and to arrange interviews, please contact Jacquelyn Humphrey, Communications & PR Tel: + 1 647 499 6748 or email: [email protected]

Goldmoney
Goldmoney is one of the world’s leading providers of physical gold, silver, platinum and palladium for private and corporate customers, allowing users to buy precious metals online. The easy to use website makes investing in gold and other precious metals accessible 24/7.
Through Goldmoney’s non-bank vault operators, physical precious metals can be stored worldwide, outside of the banking system in the UK, Switzerland, Hong Kong, Singapore and Canada. Goldmoney partners with Brink’s, Loomis International (formerly Via Mat), Malca-Amit, G4S and Rhenus Logistics. Storage fees are highly competitive and there is also the option of having metal delivered.
Goldmoney currently has over 25,000 customers worldwide and holds over $1.6 billion of precious metals in its partner vaults.
Goldmoney is regulated by the Jersey Financial Services Commission and complies with Jersey's anti-money laundering laws and regulations. Goldmoney has established industry-leading governance policies and procedures to protect customers' assets with independent audit reporting every 3 months by two leading audit firms.

Further information:
Visit: Goldmoney.com or view our video online

 

What To Read Next