Money Market Guru – Gold Holds Around $1300 As North Korea Concerns Resurface – COMEX Gold stayed supported around its three week low as global geopolitical worries resurfaced yet again to haunt the markets. Media reports stated that North Korea could consider testing a hydrogen bomb over the Pacific Ocean in retaliation to US President Donald Trumps recent threats to destroy the country. This hurt equities in Asia and COMEX Gold managed to stay afloat after hefty losses this week. The metal is currently trading at $1300 per ounce, up 0.40% on the day. MCX Gold futures are trading at Rs 29608 per 10 grams, up 0.15% on the day.
Gold tumbled this week after the US Federal Reserve announced that, for the first time in nine years, it would start reducing the size of its $4.5 trillion asset portfolio starting in October. The Fed kept interest rates unchanged, as widely expected, but said it would start to shrink its balance sheet by $10 billion a month. The Fed also noted that a December rate increase remains on the table.
Fed noted that information received since the Federal Open Market Committee met in July indicates that the labor market has continued to strengthen and that economic activity has been rising moderately so far this year. Job gains have remained solid in recent months, and the unemployment rate has stayed low. Household spending has been expanding at a moderate rate, and growth in business fixed investment has picked up in recent quarters.