Gold consolidates, other precious metals prices rise

Gold was consolidating on Wednesday morning in London while investors continue to ponder the likelihood of an US interest-rate rise in the near future.

– The spot gold price was last at $1,321.15/1,321.60 per ounce, up $1.70 on the previous close. Trade has ranged from $1,314.60 to $1,322.55 so far.

– While comments from Federal Reserve governor Lael Brainard on Monday lowered the odds of a near-teram rate rise – she warned it would be a mistake to raise interest rates too quickly –  concern that Fed members increasingly believe “the benefit of keeping monetary policy accommodative is waning appears have left markets uneasy”, National Australia Bank said.

– Her comments represent a noticeable change in tone after various Fed members have in recent weeks backed the idea of higher rates despite uneven US data and questions about the health of the global economy.

– Market participants see the odds of a September rate increase at just 15 percent and December at 56.5 percent, according to the CME Group FedWatch tool.

– In the other precious metals, silver was up around 18 cents at $19.055/19.075 per ounce, with platinum and palladium both $10 higher at $1,040/1,046 and $657/665 respectively.

– In supply-side news, Amplats is bringing forward the rebuild of its Waterval furnace after a furnace leak. The smelter accounts for a fifth of the company’s refined platinum output. Concentrate will be stockpiled but refined production will suffer because its other smelters are already running at full capacity. This is likely to accelerate the drawdown in stocks, FastMarkets ‘ William Adams noted.

(Additional reporting by Dalton Barker, editing by Mark Shaw)

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