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Gold Hit Its Highest Level in More Than a Week on September 21

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Gold inched higher on Wednesday, September 21

After gaining for two consecutive trading days, gold prices inched higher on Wednesday, September 21. This gain occurred against the backdrop of the Federal Reserve meeting and the marginally lower dollar.

At 2:30 PM EDT on Wednesday, September 21, the COMEX gold futures contract for December delivery was trading at $1,335.00 per barrel, a gain of ~1.3%. The COMEX silver futures contract for December delivery was trading at $19.75 per barrel, a gain of ~2.5%.

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The Fed left the interest rates unchanged

The Federal Reserve left the interest rates unchanged at its meeting on Wednesday, September 21, but it left the door open for a rate hike in 2016. According to the Fed’s statement released at 2:00 PM EDT on Wednesday, September 21, the case for an interest rate hike has strengthened.

The Fed added that progress toward its inflation and employment targets would add more strength. The policymakers decreased their expectation for the number of interest rate hikes in 2016 from two to one. Three out of 17 policymakers think interest rates should remain unchanged in 2017.

Gold gained strength as the day progressed

Gold and silver started Wednesday, September 21, on a positive note. It gained strength throughout the day amid the Fed’s interest rate decision and a marginally weaker US dollar. Please read Analyzing Copper, Gold, and Silver Early on September 21 to see how metals traded in the early hours.

The respective chances of an interest rate hike in November and December moved from Tuesday’s 22% and 59.2% to 14.5% and 59.3% after the interest rate decision on Wednesday, September 21.

At 2:50 PM EDT on September 21, precious metal producers Barrick Gold (ABX), Newmont Mining (NEM), Silver Wheaton (SLW), and Royal Gold (RGLD) rose ~5.8%, ~6.3%, ~5.4%, and ~7.9%, respectively. The SPDR Gold Trust ETF (GLD) rose ~1.2%.

The final article in this series summarizes the performance of companies in the energy, metals, and mining sectors on Wednesday, September 21.

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