Gold futures jump to six-year high at US$1,427

Business | 18 Jul 2019 10:50 am

Gold futures finished sharply higher in US tarde Wednesday, sending prices to a fresh six-year high, as the U.S. dollar weakened and traders weighed expectations for a U.S. interest-rate cut.

Prices climbed further in electronic trading Wednesday afternoon, following the release of the Federal Reserve’s Beige Book—the central bank’s periodic examination of the U.S. economy, MarketWatch reports. The report said the economy is expanding at roughly same “modest” pace as indicated in the last survey.

The report followed news Tuesday that Fed Chariman Jerome Powell reiterated in a speech in Paris that the economic outlook hasn’t improved since the last Federal Open Market Committee meeting in June, setting the stage for an interest-rate cut.

Ahead of the Beige Book release, August gold trading on Comex added US$12.10, or 0.9 percent, to settle at US$1,423.30 an ounce, after closing 0.2 percent lower Tuesday. Prices for the most-active contract posted their highest finish since May 14, 2013, FactSet data show. In electronic trading shortly after the Beige Book, the contract traded at US$1,427.

Gold had “fallen overnight to test that key US$1,400 level and bounced from that,” said Brien Lundin, editor of Gold Newsletter, referring to the gains in the regular trading session. “I believe that was an important confirmation that got technical traders to jump in.”

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