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Gold surges to 15-week high as dollar slides after Mnuchin, Fed minutes

Published 02/23/2017, 08:44 AM
Updated 02/23/2017, 08:44 AM
© Reuters.  Gold reaches 15-week high

Investing.com - Gold prices added to overnight gains during North American morning hours on Thursday, reaching the strongest level since November as the U.S. dollar wobbled after remarks from new U.S. Treasury Secretary Steve Mnuchin and the latest Federal Reserve meeting minutes.

Comex gold futures rose $14.70, or about 1.2%, to $1,248.05 a troy ounce by 8:40AM ET (13:40GMT), after touching $1,248.70 earlier, a level not seen since November 11. Spot gold was up almost $10 to $1,247.20 per ounce.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.25% at 101.07 in New York morning trade, retreating from the prior session's high of 101.71.

Treasury yields were lower, with the U.S. 10-Year yield around 2.390%.

U.S. Treasury Secretary Steven Mnuchin said in an appearance on CNBC that he wants to see "very significant" tax reform passed before Congress' August recess, in what was his first interview since taking office. However, he failed to provide any details.

Investors have been looking for clues about when the Trump administration will push through tax reform. Many believe he will announce his tax policies in a speech to Congress on Tuesday next week.

Meanwhile, minutes from the Fed's latest meeting showed policymakers thought it may be appropriate to raise interest rates again "fairly soon" should jobs and inflation data come in line with expectations.

However, the U.S. central bank gave no firm signal on the timing of its next rate move, with policymakers noting uncertainty over economic policy under the Donald Trump administration.

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Fed fund futures priced in about a 20% chance of a rate hike in March, according to Investing.com’s Fed Rate Monitor Tool, little changed from before the release of the Fed minutes. Odds of a May increase was seen at around 51%, while June odds were at 72%.

Also on the Comex, silver futures for March delivery jumped 21.3 cents, or about 1.2%, to $18.16 a troy ounce, also a 15-week high.

Meanwhile, platinum was up 1.6% to $1,018.75, while palladium gained 1.2%, to $778.50 an ounce.

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