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Gold holds biggest jump since Brexit vote on lower Fed rate bets

Wednesday, September 7, 2016 - 10:34
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Gold held the biggest daily increase since June and traded near the highest in almost three weeks as the dollar weakened amid diminishing bets on an interest-rate rise in September.

[SINGAPORE] Gold held the biggest daily increase since June and traded near the highest in almost three weeks as the dollar weakened amid diminishing bets on an interest-rate rise in September.

Bullion for immediate delivery traded at US$1,349.16 an ounce at 9:37am in Singapore, after surging 1.7 per cent on Tuesday, the most since the results of the Brexit vote came out on June 24, according to Bloomberg generic pricing.

The metal resumed its rally this year on reduced chances of the Federal Reserve tightening monetary policy this month after the Institute for Supply Management's index of US non-manufacturing industries slumped to its lowest level since Feb 2010.

A gauge of the greenback traded at the lowest level this month. The Federal Open Market Committee meets on Sept 20-21.

"The US dollar remains the key factor driving the gold price," said David Lennox, a resource analyst at Fat Prophets in Sydney.

"The latest sets of data out of the US would tend to suggest no change in the Fed's stance is likely, and hence the US dollar may weaken a little and gold firm up pre-FOMC."

BLOOMBERG

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