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Gold Up In Most Currencies, Biggest Winner of Fed Dovishness


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Gold Up In Most Currencies, Biggest Winner of Fed Dovishness

By Sarah Benali
Wednesday March 16, 2016 16:03

(Kitco News) - As markets continue to digest the latest Federal Open Market Committee statement, which left rates unchanged and lowered expectations for further tightening, gold prices continues to climb not only in U.S. dollar terms, but in most other currencies as well.


After falling to two-week lows earlier in the week, the metal is now up on the day in every currency term quoted Kitco’s Gold-Currency Charts. The Kitco charts provide gold prices in multiple currencies: the U.S. dollar, euro (EUR), Swiss franc, British pound sterling (GBP), Japanese yen (JPY) and Russian ruble (RUB), among others.

Gold in U.S. dollar terms saw double-digit gains following the Fed statement and into Fed Chair Janet Yellen’s press conference as markets now expect only two rate hikes this year, down from December’s forecast of four. April Comex gold futures rose more than $30 at $1,261.70 an ounce while the U.S. dollar index fell to 95.66.

A sea of green is seen in Kitco’s charts with gold priced in euro and Japanese yen up 1.15% and 1.73%, respectively. Gold priced in the Swiss franc (+1.11%), the British pound sterling (+1.45%) and the Canadian dollar (0.41%) are also up on the day.


Meanwhile, looking at Kitco’s “other currencies” chart, gold is up in all currency terms except the Russian ruble, with gold down in rubles some 0.49% on the day. The yellow metal priced in the Indian Rupee is up nearly 2% while gold in the South African rand is up 0.39%.

Colin Cieszynski, senior analyst at CMC markets, noted that it’s really been a “risk-on day” in the markets with gold in U.S. dollar terms really being the winner.

“Although we are seeing certainly gold move in other currencies, I think it’s mainly been a U.S. driven story here,” he told Kitco News over the phone Wednesday afternoon.

However, it isn’t only the Fed’s statement that is pushing gold higher, he continued.

“Even if the Fed downplayed it, the inflation numbers this morning and other inflation numbers we’ve seen out of the U.S. recently, do suggest pressures are increasing,” he said.

“If we do actually start to see inflation start to turn that also could support gold against multiple currencies.”

By Sarah Benali of Kitco News; sbenali@kitco.com
Follow me on Twitter @SdBenali

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.