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Standard Bank To Pay For Gold Fix
Posted February 19th, 2014
Los Angeles, CA, Feb 19 (Tangible Investments) - by James ODell - The gold price turned modestly lower on Tuesday, easing $2.99 or 0.23 percent to close at $1,320.81 an ounce, as the dollar remained flat near six week lows on disappointing economic data while investors await the release of the minutes of the Fed’s January policy meeting. Silver rose $0.13 or 0.60 percent to close at $21.91 an ounce while posting its longest rally in at least 45 years. Silver closed above its 200-day moving average for the first time in a year on Friday.
“The premium for gold and silver has increased as people are nervous about U.S. growth,” says David Meger, of Vision Financial Markets, in a telephone interview. “The turmoil in the currency market has also pushed people toward precious metals.” Tepid U.S. housing data and the slump in New York manufacturing were the latest numbers to disappoint worried investors.
"The market is very cautious as it is awaiting the Fed minutes to be released later today and there is also lower demand out of China and Asia in general," said Bernard Sin of MKS SA. "Based on the technical environment though the rally may not be over, because the short-term trend is still bullish and we are building higher lows ... at times, it looks overbought but any retracement looks healthy."
Investors are particularly interested in the central bank's vote to cut its stimulus program by another $10 billion to $65 billion last month. Fed Chairwoman Janet Yellen has made it clear that as long as the economy shows steady improvement, the central bank will continue to scale back its massive quantitative easing (QE) program.
Meanwhile, Standard Bank, of South Africa, is a favorite to buy Deutsche Bank's place in the global gold price setting process, known as the "fix," say sources. In the bullion market, a seat in the process of determining the benchmark gold price is considered a mark of distinction. Deutsche Bank announced in January that it would be selling its seat at the fix, after two decades, and will withdraw from much of its commodities business.
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