Gold Investments Market Update - Federal Reserve Statement Warns of Stagflation
-- Posted Wednesday, 6 August 2008 | Digg This Article | Source: GoldSeek.com
Gold
Gold finished trading in New York yesterday at $878.90, down $20.50 and silver was down 56 cents to $16.57. Gold has recovered somewhat in Asian and early European trading and is trading at $885.20/885.70 per ounce (1200 GMT).
With commodities and oil falling again yesterday, gold continued its recent poor performance. Gold suffered technical damage yesterday with a close below the 200 day moving average at $887/oz. A weekly close below $887/oz would be even more damaging. The short term trend remains down, however gold’s long term fundamentals remain sound and should result in gold remaining above strong support above the old resistance at the old all time nominal record high at $850.
The PGMs (platinum group metals) have had vicious sell offs in the last month but are up strongly today – platinum by 6.3% and palladium by nearly 4%.
As expected, the Federal Reserve voted to keep its key lending rate steady at 2.0% for the second consecutive meeting with only Dallas Fed President Richard Fisher voting for a rate hike.
In the accompanying statement, the Fed acknowledged the continuing risks posed by stagflation – they warned that upside risks to inflation are a "significant concern," but kept the focus on downside risks to growth.
Stagflation is a real risk to many international economies right now and this should see gold remain strong in the coming months.
Gold and Silver
Gold is trading at $885.20/885.70 per ounce (1200 GMT). Silver is trading at $16.65/16.70 per ounce (1200 GMT).
PGMs
Platinum is trading at $1627/11633 per ounce (1200 GMT). Palladium is trading at $370/375 per ounce (1200 GMT).
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