The precious metals were looking weak for the majority of the trading session yesterday and then the FOMC minutes prompted a reversal of course. The Federal Open Market Committee January minutes implied that a majority of members are still of the mindset to keep rates unchanged for longer than expected. The committee considered such factors as USD strength as well as slow wage growth. Instead of tightening around mid-2015, economists are now forecasting that it will occur for the first time around September. Gold traded higher off the news and finished yesterday’s afternoon session on the highs of the day.
In the overnight session, the chairman of the committee of 19 eurozone finance ministers announced that an emergency meeting will convene to consider an extension for Greece’s bailout. This was the clearest sign yet that the two sides may be nearing a deal. This news acted as a counterbalance to the FOMC minutes and gold proceeded to sell off from its overnight highs before finding support in the NY session ahead of psychological support at $1,200.
The Reserve Bank of India announced that the import of gold coins and medallions is no longer prohibited. This comes with caveats though. Only certain nominated banks are permitted to trade coins and all coin sales must be against upfront payments. Overall, this is friendly for the precious metals and it is a move in the right direction for India’s coin market.