Los Angeles CA, July 10 (Tangible Investments) - by James O’Dell - Gold and Silver prices jumped more than one percent in electronic trade on Thursday, after Gold added $2.75 or 0.21 percent on Wednesday to close at $1,326.85 an ounce when the dollar weakened after the minutes of the Fed's June policy meeting gave no clue as to when U.S. interest rates would rise. Silver gained $0.03 or 0.14 percent to close at $21.13 an ounce, while the Gold/Silver ratio, the measure of the number of Silver ounces needed to buy one ounce of Gold, rose to 62.79.
Gold has been under pressure since last week's better than expected U.S. jobs report fueled speculation of a possible early hike in rates, but a review of the Fed minutes gave no such indication. The minutes did, however, indicate broad agreement among policymakers that the Fed's monthly bond buying program will end in October. The minutes also revealed that Fed officials see the turmoil developing in the Middle East and Ukraine "as posing possible downside risks to global economic activity or potential upside risks to world oil prices."
Escalating violence in Iraq, Ukraine and now Israel are boosting the demand for Gold as a safe-haven, while the Fed has vowed that U.S. interest rates will remain low for a “considerable time,” after the bond buying program ends, stoking inflation concerns. “Geopolitical unrest across the globe is imploding, and people are realizing that they need to start hedging against future inflation,” says Jeff Sica, of Sica Wealth Management.
“There is still a lot of skepticism in the market, but once we see Gold go above $1,400, we will see more buyers come out,” said Peter Schiff, of Euro Pacific Capital, in a telephone interview. In India, Gold gained support after officials announced the new Modi government's decision to keep import duties on the yellow metal unchanged at 10 percent, dashing investor expectations for a reduction. India's August Gold contract jumped as much as 3 percent on the news.
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