Gold Rises After Lower Wages Could Delay US Rate Hike

Gold futures rose to a four-week high on speculation that the Federal Reserve will keep U.S. interest rates low for a considerable time to bolster the economy.

Average hourly earnings for all U.S. employees fell 0.2 percent in December from a month earlier, the most since comparable records began in 2006, government data showed Jan. 9. Gold priced in euros rose to the highest since September 2013 as Greece prepared for a Jan. 25 election amid speculation that the country will exit the currency bloc. Japan plans a record budget to support an economy that fell into recession.

“There are some people who believe the Fed won’t raise rates at all in 2015,” Adam Klopfenstein, a senior market strategist at Archer Financial Services Inc. in Chicago, said in a telephone interview. “The Fed is put in a corner because they need to raise rates because of strength in the U.S. economy, but Europe and Japan continue to struggle.”

Gold futures for February delivery rose 0.9 percent to $1,226.60 an ounce at 10:26 a.m. on the Comex in New York. Earlier, the metal reached $1,231.30, the highest for a most-active contract since Dec. 11.

via Bloomberg

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza