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Precious Metals Rally on Fed Chairman’s Comments, Palladium Hits Record High

Summary:
Gold and other precious metals rallied today after a speech from Federal Reserve Chairman Jerome Powell, with palladium reaching the record high for the most-actively traded contract. Platinum was an exception, falling more than 1%. Markets focused on Powell’s statement that interest rates are “just below” the level that can be considered “neutral for the economy.” Market participants interpreted the phrase as a sign that the Fed may halt monetary tightening much sooner than was previously expected. Such outlook hurt the dollar, helping commodities priced in the US currency. Additionally, the news alleviated pressure from prospects for higher borrowing costs, which make it more expensive for investors to hold non-yield bearing assets. February contract for delivery of gold gained 0.66%

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Gold and other precious metals rallied today after a speech from Federal Reserve Chairman Jerome Powell, with palladium reaching the record high for the most-actively traded contract. Platinum was an exception, falling more than 1%.

Markets focused on Powell’s statement that interest rates are “just below” the level that can be considered “neutral for the economy.” Market participants interpreted the phrase as a sign that the Fed may halt monetary tightening much sooner than was previously expected. Such outlook hurt the dollar, helping commodities priced in the US currency. Additionally, the news alleviated pressure from prospects for higher borrowing costs, which make it more expensive for investors to hold non-yield bearing assets.

February contract for delivery of gold gained 0.66% to $1,227.9 per troy ounce as of 20:34 GMT on COMEX today. Futures for delivery of silver in March climbed 1.36% to $14.42 per ounce. Spot price for palladium surged as much as 2.77% to $1,186.98 per ounce. At the same time, platinum dropped 1.1% to $824.7 per ounce.


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Vladimir Vyun
Vladimir is an online journalist with background in computer science and work experience in pension funds. He contributes news reports, fundamental analysis and sentiment forecasts to TopForexNews.com and CommodityBlog.com. His main specialization is the currencies of emerging economies and inter-market correlations with commodity and bond trading.

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