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TDS: Investors May Return To Gold Once Dec. Fed Rate Hike Out Of The Way

Kitco News

Gold prices were spooked over the last week by worries the next Fed chief may be hawkish, but the metal is likely to gain traction down the road on potentially less Fed tightening than many expect, says TD Securities. Gold was hurt by news reports that Stanford economist John Taylor could be nominated as the next Fed chief, which could mean the Fed gets more aggressive on the interest-rate front, TDS says. Additionally, gold fell as stocks rose on improved prospects for President Trump’s tax reform. “As such, it's no surprise gold dropped to $1,280/oz and is at risk of retracing back into $1,250/oz territory,” TDS says. “At this stage, traders are pricing nearly a 100% chance of a December hike, which suggests no relief for the yellow metal for now.” But once the expected hike is out of the way, TDS says, low inflation and a “long-in-the-tooth” expansion may limit 2018 tightening to just one or two moves. “With potentially less than the three hikes predicted by the Fed, high deficits due to the tax cuts could well get investors interested in the precious-metals complex next year,” TDS says. “At that time, we will see more data and will know who the next Fed chairperson is, which should shed light on Fed policy moves moving forward.”

By Allen Sykora of Kitco News; asykora@kitco.com

 

Commerzbank: Russian Central-Bank Gold Purchases Highest Since Oct. 2016

Tuesday October 24, 2017 08:48

Russia’s central bank last month purchased the most gold in nearly a year, reports Commerzbank. “By its own account, the Russian Central Bank (CBR) topped up its gold reserves by 1.1 million to 57.2 million ounces in September,” Commerzbank says. “As such, the CBR purchased a good 34 tonnes of gold last month. According to the World Gold Council, the CBR bought 129 tonnes of gold in total in the first eight months of the year. Thus the September purchases reported by the CBR were the highest since October 2016.” 

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