Precious metals all surged overnight on the Fed’s still apparently dovish view on interest rates.
Gold surged by US$20 while platinum hit a 14-month high as the Fed left interest rates unchanged and made only small changes to its view on the economy.
Some commentators suggested that the Fed’s remark that risks to the economy had diminished might point to a rate rise in September.
But this was not enough to stop the bulls stampeding back into the metal, especially as one of gold’s fiercest critic is also seemingly backtracking.
Jeffrey Currie, Goldman Sach’s head of commodities research, had been tipping gold to crash through US$1,000 up until recently but his mood has changed this year.
And now, he suggests, gold is a great hedge for current global economic uncertainties.
If China imposes capital controls for instance, you will get real physical demand for gold he told CNBC.
True in an echo from the past he added gold is just a strategic hedge and tactically ‘we don’t like it’, but Goldman now has a target for the gold price currently of around US$1,300.
A couple of hours into US trading it was around US$1,338. Silver was trading at US$20.22, while platinum was up US$3 at US$1,135.