The gold prices yesterday briefly dropped below $1,250 an ounce, against strengthening US dollar, but then recovered and this morning were moving around the level of $1,260 an ounce, reflecting weak macroeconomic data coming out of China. On the other hand, growth of US dollar (the euro/dollar pair fell below 1.10 for the first time since late July) has pushed the gold price in euro this morning up to a nine-day high at €1,145. The inflow of deposits in ETF-funds (2.2 tons) has also brought support for gold. Minutes of the last meeting of the US Federal Reserve (20-21 September) did not contain any new information on the Fed's next steps. The decision to keep interest rates unchanged, adopted at the meeting, was not unanimous. However, the FOMC members were unanimous in saying that the number of arguments in favor of the second rate increase in recent years has increased. We remain confident that the US central bank will raise interest rates in December. According to the futures on the federal funds, now the probability of such an outcome of events is approximately 70%. On the other hand, a further tightening of monetary policy after that is likely to be very slow.
Source: RBC Quote