Gold Slightly Gains in Asia, Reserve Bank of Australia Makes a Bold Call

On Tuesday, gold prices edged up with threat sentiment dominating, although Australia’s central bank sent a strong indication, it sees an end to the global monetary easing for now.

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On Tuesday, gold prices edged up with threat sentiment dominating, although Australia’s central bank sent a strong indication, it sees an end to the global monetary easing for now.

Delivery of gold for April on the Comex division of the New York Mercantile Exchange increased 0.17% to $1,234.25 a troy ounce.

Similarly, on the Comex, delivery of silver futures for March edged up 0.02% to $17.697 a troy ounce, while copper fell 0.38% to $2.641 a pound.

“There is no longer an expectation of further monetary easing in other major economies,” the RBA statement on Tuesday announcing rates on hold at a record low 1.5% said. “The board judged that holding the stance of policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.”

On Monday,  gold prices added to overnight increases in North American morning trade, hitting the strongest level since November as investors sought the supposed safety of the yellow metal during growing concerns over political dangers around the globe.

Prices of the yellow metal increased 2.4% the previous week, its best weekly gain in seven months.
With President Donald Trump’s administration on the back foot over its immigration and other policies, investors continued to pile in to gold as they watched political risk elements.

In the euro zone, traders are observing developments in countries where anti-establishment activities are gaining power ahead of elections.

“French far-right presidential candidate Marine Le Pen revealed a manifesto pledge to take her country out of the euro over the weekend, underscoring political risk in the world’s biggest single market,” according to the report.

Investors frequently purchase  gold as a refuge against economic and political improbability.

Temporarily, market participants think about how the recent U.S. jobs report will impact  the pace of Fed Reserve interest rate hikes this year.

In January, the U.S., employers added 227,000 workers, the biggest gain in a month since September. However, unemployment inched  up to 4.8% as additional people search for work, and the pace of wage growth reduced.

The sluggish wage development was seen as weakening the case for short term interest rate hikes. Gold is sensitive to moves in U.S. rates, which boost the opportunity cost of holding non-yielding assets such as bullion. A gradual route to higher rates is perceived as less of a risk to gold prices than a swift series of increases.

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