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Gold up after Fed minutes release

Xinhua, October 14, 2016 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange rose on Thursday as traders digested the Federal Open Market Committee (FOMC) meeting minutes released after the market's close on Wednesday.

The most active gold contract for December delivery rose 3.8 U.S. dollars, or 0.3 percent, to settle at 1,257.6 dollars per ounce.

The September FOMC meeting minutes indicated that despite conditions being nearly ready for a rate hike, the U.S. central bank voted to wait for further evidence of strong employment and increased inflation before increasing rates. Analysts believe the Fed is likely to act before the end of the year, as previously signaled.

After the release of Wednesday's FOMC minutes, investors believe the Fed may raise rates from 0.50 to 0.75 during the December FOMC meeting.

According to the CME Group's Fedwatch tool, the current implied probability of a hike from 0.50 to 0.75 is at 9 percent for the November 2016 meeting, and 70 percent at the December meeting.

Gold was given further support as the U.S. Dollar Index fell by 0.42 percent to 97.57 as of 1730 GMT. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.

Gold was prevented from rising further as the U.S. Department of Labor released its weekly jobless claims report showing new claims remaining unchanged at 246,000 during the week of October 8th. Analysts note that these figures were on the low end of expectations, and were a positive sign for the U.S. economy, driving investors away from the precious metal's safe haven properties, and giving the Fed's doves encouragement.

Traders are also waiting for the release of the producer price index report on Friday, along with the retail sales report.

Silver for December delivery dropped 4.7 cents, or 0.27 percent, to close at 17.458 dollars per ounce. Platinum for 2017 January delivery fell 9 dollars, or 0.96 percent, to close at 932.9 dollars per ounce. Enditem