Friday, 21 November 2014

Gold Volatile In Midst Of Major Economic Events

Gold futures traded volatile on Friday on the back major economic events such as FOMC minutes release, ECB president speech and China rate cuts.The euro tumbled, after comments from officials both the euro zone. The euro currency quotes at $1.2434, down 0.85% on Thursday and the US dollar index quotes at 88.16, up 0.52% on Thursday.

European Central Bank President Mario Draghi sent a strong signal Friday that the central bank is ready to step up the pressure and expand its asset-purchase programs if inflation fails to show signs of quickly returning to the ECB's target.

We will continue to meet our responsibility--we will do what we must to raise inflation and inflation expectations as fast as possible, as our price stability mandate requires of us, Mr. Draghi said in a speech to a banking conference.

If on its current trajectory our policy is not effective enough to achieve this, or further risks to the inflation outlook materialize, we would step up the pressure and broaden even more the channels through which we intervene, by altering accordingly the size, pace and composition of our purchases, Mr. Draghi said. Annual euro zone inflation was 0.4% last month, far below the ECB's target of just below 2%.

In response to both a slowing domestic and global economy, the People's Bank of China, the country's central bank, has cut benchmark interest rates in the world's second-largest economy. It has cut the one-year deposit rate by 25 basis points to 2.75 per cent and the one-year lending rate by 40 basis points to 5.6 per cent. The rate will be effective from Saturday. The central bank said it was also giving banks more freedom to set their interest rates, raising the ceiling for deposit rates to 1.2 times the benchmark rate from 1.1 times.
The minutes of the US Federal Reserve's last policy meeting released Wednesday showed that the Fed decided not to alter its wording on the timing of any interest rate increases. Fed officials worried that a change could be misinterpreted by financial markets. In last week of October, the Fed voted to end its asset purchase program, by a 9-1 vote, and repeated that rates are likely to stay near zero for “a considerable time,” adding further that the first move to raise rates could come sooner if the economy is stronger than expected.
The COMEX Gold December delivery quotes at $1,195.50, up $4.60 a troy ounce and Silver December delivery quotes at $16.263, up $0.126 a troy ounce. The MCX Gold December delivery quotes at Rs 26470, up Rs 7 and Silver December delivery quotes at Rs 35996, up Rs 180 per 1 kg. Indian rupee gained strengthened against the US dollar on Friday with the currency quotes at Rs 61.756, down 0.22% on Friday.

No comments:

Post a Comment