Gold Jumps After Fed Minutes (Update 1)
NEW YORK (TheStreet) -- Gold prices jumped Wednesday afternoon after the minutes of the Federal Reserve's latest policy meeting showed growing willingness to provide more monetary accommodation.
"Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery," the minutes read.
Gold for December delivery was gaining $9.90 to $1,652.80 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,649.70 and as low as $1,636.30 an ounce, while the spot price was up $6.70, according to Kitco's gold index.
Before the FOMC minutes on Wednesday, gold settled down $2.40 at $1,640.50 an ounce.
Silver prices for September delivery settled up 13 cents at $29.56 an ounce, while the U.S. dollar index was down 0.24% to $81.71.
"I think expectations of further monetary easing -- not only by the Fed but the European Central Bank and maybe some other central banks -- is underpinning gold at the moment, and I think a growing number of observers are anticipating possible easing by the Fed this autumn," said Jeffrey Nichols, senior economic adviser at Rosland Capital, ahead of the release of the Fed minutes.
Traders are also keeping their sights on the action in oil as uncertainty of supply can serve to prop gold up as a safe haven. Nichols also said there is concern in the gold markets about unrest among mining workers in South Africa.
Though the upheaval near a Lonmin mine in the country caused a spike in platinum prices last week, Nichols thinks possible sympathy walkouts among other miners who work in the country's gold mines could have an impact on the international gold trade.
Physical demand in India and China has remained soft through the summer. The ruppee price of gold is at all-time highs, which has caused price sensitivity for the short run, according to Nichols.