Precious Gold has hit a 3 Month High

The recent precious gold price has reached its highest level since July, and is currently valued at $1,168.80/oz. The U.S. dollar meanwhile is at a 3-week low, which is seen as a result of the postponement of the expected interest rate hike by the Federal Reserve. The dollar index fell down by 0.1 percent amid growing speculation that the U.S. rates will rise later this year. It was all good news for everyone that is dealing in gold though, since spot gold reached an all time peak of $1,169.00 an ounce, which was an increase in value of 0.6 percent, from $1,163.96 an ounce at 1401 GMT.

The U.S. gold futures for December delivery settled up $8.60 an ounce, and were valued at $1,164.50. The indications that the U.S. rates would rise this year, had increased the opportunity cost of holding gold, and this lifted the dollar up and pushed the prices of gold down to 5 ½ year lows in July. However, things have not gone as planned as mixed U.S. economic data and a global economic slowdown affected U.S. growth and have dampened expectations.

Delay In Expected U.S. Interest Rate Hike

The Federal Reserve lifting interest rates this year is not looking possible according to analysts in the industry, and this has had the reverse effect on the value of gold. The problems in China combined by the bad jobs report data from the United States means that a lot of people aren’t expecting an interest rate hike to be introduced this year. However, current reports are suggesting that 2 Federal Reserve policy makers, who are often at odds, have both suggested that there could well be an interest rate hike in December. That is subject to the economic data remaining favorable and that once the interest rate hikes begin, they are gradual.

This has forced money and hedge funds managers to raise their bets in COMEX gold and silver, and this has resulted in 4 month highs in the week that has ended on October the 6^th. The price of gold has really been boosted by the positioning side and the currency side, since the technical picture is improving. This is luring some more short-term bullish positioning back into the current market.

The Global Picture

The Association of Mineworkers and Construction Union in South Africa recently voted to go on strike at 3 operations. This meant that Palladium prices unexpectedly fell from their recent high and ended the day at $689 an ounce, which was a 2.6 percent fall in value. This ended a 4 month high for Palladium, and there was increasing pressure coming from short-term technical, producer selling, and profit-taking.

The Volkswagen fallout has also played its hand in affecting the prices of platinum and palladium, while silver was up by 0.1 percent and ended up at $15.84 an ounce and Platinum was up by 1.3 percent to end at $991.50 an ounce.