Gold price fell by 5.18% in February
The gold price fell by 5.18% in February, which is relatively sharp retreat after rising of nearly 8% in January. The decline of the commodity came, although during the last week the price rose for the first time in five weeks, rising by 0.66% to 1,213.10 USD per ounce. The investors corrected expectations for an […]
The gold price fell by 5.18% in February, which is relatively sharp retreat after rising of nearly 8% in January. The decline of the commodity came, although during the last week the price rose for the first time in five weeks, rising by 0.66% to 1,213.10 USD per ounce. The investors corrected expectations for an early interest rate growth in USA, after the Federal Reserve Chairman Janet Yellen determined in front of the Senate Banking Committee the possibility of “unlikely”. According to its economic conditions will require an increase in interest rates “at least after the next few meetings” of the Federal Commission for the open market.
On the second day of her testimony in front of the Financial Services Committee on Wednesday Yellen repeated her thesis, saying that wage growth and inflation must be accelerated before the bank take rising rates despite positive signals from the labor market. According to the most market analysts Yellen’s statement gives the Fed more flexibility, the institution may even postpone the first rise in interest rates in 2016.
Last attitudes about the future monetary policy of USA are seen as a bullish signal for the gold, as it decreases the relative price, making it more affordable for holders of other currencies than the USD. The data on Friday showed that the US economy grew by 2.2% in the fourth quarter, down from an initial forecast of an increase of 2.6%. In the third quarter, the economy expanded by 5%.
Meanwhile, the silver futures with May delivery rose with 1.67% last week despite the fall of 0.4% on Friday and the settle at 16.55 USD per ounce at the end of trading. For months the metal fell by 3.8%.
The contracts on copper with delivery in May also fell with 0.11% on Friday to 2.691 USD per pound. For the week, the price of the red metal rose by 3.74% and for the entire month of February – with 7.95%. The price of the red metal rose after expectations that Beijing authorities will provide additional incentives for slowing Chinese economy. The forecasts ultimately fell short and on Saturday the Chinese central bank announced that shrinks its main interest rate by 25 basis points to 5.35%.