Gold prices rose to a new 15-month high, supported by the weakening of the US currency, but later again fell below $ 1,300 an ounce, as the dollar began to regain losses. It should be emphasized, many Asian markets and the UK market closed due to national holidays, so trading volumes are reduced.
The dollar began to actively become cheaper after the Federal Reserve on Wednesday left the rate unchanged and reiterated that future rate increases depend on the data. The delay in raising interest rates, tends to encourage demand for gold, as the metal is reduced relative cost containment, guaranteeing investors a higher profit. Analysts say that the main factor that will determine the prospects for gold price will remain the likelihood of the Fed raising interest rates. Today futures on interest rates Fed indicate that the probability of a rate hike of 17% in June.
"The longer the Fed delays raising interest rates, the better for the gold - said HSBC analysts -. Precious metals market will now focus on the prospects for increasing rates at the next meeting of the Federal Reserve in June, and the likelihood that the Central Bank did raise rates later this year, can help limit the growth of prices for bullion. " Gold rose in price by 17 percent since the beginning of the year on expectations that the Fed will not raise rates aggressively this year.
In the course of trading was also influenced by the US statistics. Final data presented Markit Economics, showed: the seasonally adjusted manufacturing PMI index fell in April to 50.8 points from 51.5 points in March. The latter value has coincided with the preliminary estimates and forecasts. However, the index dropped below the average for the 1st quarter of 2016 (51.7), and pointed to the weakest improvement in the general conditions for a little more than 6.5 years.
Meanwhile, a report published by the Institute for Supply Management (ISM), showed that ISM manufacturing index fell to 50.8 in April, compared with 51.8 in March. It was expected that this figure will decline only to 51.5 points. 15 of 18 industries reported an increase in new orders compared with 13 branches in March. Also, 15 of 18 industries reported an increase in production in comparison with 12 branches in March.
Some analysts believe that the recent rise in price of gold is partly due to technical factors, as traders under the influence of the current dynamics of actively open position and reinforce the trend. Recall, on the gold price last week increased by 5%.
In addition, data Commodity Futures Trading Commission showed that hedge funds and money managers reduced their net long position in gold in the week ended last Tuesday.
The cost of the June gold futures on the COMEX today at $ 1296.0 per ounce.