Gold/Platinum Ratio Dangerously Tight

Gold remains range bound trading at 1197.60 up by $2.80 in the Asian session. Gold had closed at 1195.00 a day after the FOMC statement and Janet Yellen’s press conference. In a surprise move Platinum closed just a few dollars spread from gold at 1199 and followed the yellow metal’s course this morning gaining $2.05. Silver dipped 39 points to trade at 15.895 ignoring clues from precious metals and industrial metals.  Gold rose on Thursday after the Federal Reserve said it would take a patient approach toward raising interest rates, boosting stock markets and commodities, though it pared early gains as the dollar strengthened against a basket of currencies.

Fed Chair Janet Yellen said the Fed was unlikely to hike rates for “at least a couple of meetings,” meaning April of next year at the earliest. Rising U.S. interest rates increase the opportunity cost of holding noninterest bearing assets such as gold, and also lift the dollar, in which the metal is priced.

Global equities markets rallied, with Wall Street up more than 1 percent for a second straight day with investor sentiment after the Fed altered a pledge to keep rates near zero for a “considerable time,” but struck a more cautious tone than many had expected as the United States mulls its next rate rise. Most traders are now expecting a rate increase between April and June 2015. Thirteen of 19 primary dealers, or the banks that deal directly with the Fed, said they expect the first rate hike by June, including one forecasting a hike as early as April. All but two expect at least one rate hike in 2015.With little data on the calendar today, gold is expected to decline but remain within its current trading range.

Base metals fell on Thursday as investors saw them as over-priced relative to other commodities such as oil, and as the outlook in top metals consumer China remained gloomy following house price data. China’s new home prices fell again in November as the market continued to defy government efforts to revive it, data showed earlier. A business survey meanwhile showed a deep drop in real estate investment plans. Copper recovered in the Asian session to trade at 2.856 after coming close to a seasonal low on Thursday against the strength of the US dollar which touched a multi-year high. In industry news, China’s top refined lead producer Henan Yuguang Lead and Gold Ltd has cut its output by up to 30 percent due to low prices.