Gold: an overview of the market situation

Gold prices rose sharply today, reaching in this four-week high, which was due to the weakening of the dollar and the Federal Reserve's statements that the policy remains committed to adaptive measures and low interest rates.

Recall that the U.S. central bank yesterday reduced the amount of QE to $ 10 billion - $ 35 billion, but kept the benchmark interest rate at a record low of 0-0.25% per annum. The Fed also changed the outlook on the dynamics of the interest rate on the 2015-2016 years. Regulator expects that by the end of 2015 it will be 1.25% (previous forecast by - 1%), and by the end of 2016 will grow to about 2.5% instead of 2.25% previously expected. The Fed also worsened outlook for economic growth in the country in 2014 to 2.1-2.3% from the expected 2.8-3% in March, according to a press release from the regulator. Inflation at 1.5-1.7% (from the March forecast - 1.5-1.6%), the unemployment rate will be within 6-6,1% instead of the previously expected 6.1-6.3%. Forecast for 2015 U.S. GDP growth remained at 3-3.2%, inflation - at the level of 1.5-2%, and the forecast for unemployment lowered to 5.4-5.7% from the previous 5.6 - 5.9%. In the long term, the Fed predicts growth of world's largest economy by 2.1-2.3%, the unemployment rate in the range 5.2-5.5%, inflation at around 2%.

As for today's events, the data had little impact on the U.S. labor market, which showed that the number of initial claims for unemployment benefits fell by 6,000 and amounted to a seasonally adjusted 312,000 in the week ended June 14. Economists had expected the number of applications will be reduced to only 316,000 to 318,000. Moving average for four weeks, which smooths weekly volatility, fell by 3,750 to 311,750. The report also showed that the number of workers continuing to receive unemployment benefits amounted to a seasonally adjusted fluctuations 2,560,000, a decrease of 54,000 in the week ended June 7.

Market participants also continue to monitor the developments in Iraq and Ukraine. "A weaker dollar and geopolitical tensions support gold prices, but the lack of strong physical demand and outflow of funds from exchange-traded funds can weaken Rally" - said precious metals trader in Hong Kong.

Due to low demand in the physical market, ">Stocks of the world's largest gold exchange-traded fund secured SPDR Gold Trust declined two consecutive session until Wednesday, approaching the five-month minimum.

The cost of the August gold futures on the COMEX today rose to $ 1298.0 per ounce.