Gold price recovers following FOMC sell-off

The gold price has recovered from the previous session’s lows during Friday December 16 trading while participants digested news of the recent US rate increase.

Spot gold was recently indicated at $1,133.35/1,133.70 per oz, up $5.90 on the previous day. Yesterday the price had hit fresh ten-and-a-half-month lows of $1,123 per oz.

“We are still in the initial aftermath of the FOMC announcement and prices are adjusting to the more hawkish outlook that the Fed portrayed, but given how telegraphed the decision was and all the geopolitical uncertainty that 2017 will bring, we would be on the lookout for gold buying as investors take out some insurance against a possible correction in other over-stretched markets,” Metal Bulletin analyst William Adams said.

While the dollar index was down 0.1% at 102.85, it was still holding close to the near-14-year highs it hit yesterday. The greenback has soared after the US FOMC raised interest rates on Wednesday and hinted at three increases to come in 2017.

In data today, the EU final CPI was unchanged at 0.6% as was the final core CPI at 0.8%. The trade balance, however, was down on expectations at $19.7 billion.

From the USA, there will be building permits and housing starts data.

The spot silver price was at $16.075/16.115 per oz, up $0.120, while platinum was $8 higher at $897/907 per oz. Palladium bucked the trend, dropping to $689/695, down $7.50.

(Editing by Wei Jun Lau)

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