Rally in the U.S. dollar dulled demand for the precious metal
Bullion metal prices fell on Wednesday, 09 October 2013 to settle at their lowest level in more than a week as a rally in the U.S. dollar dulled demand for the precious metal. Precious metals traded lower today as the dollar index rose on news that President Obama will nominate Janet Yellen as the next Chair of the Federal Reserve.
December gold slumped to a session low of $1294.60 per ounce and settled at $1307.10 per ounce, booking a loss of 1.3%.
December silver dipped as low as $21.75 per ounce in morning floor trade. It eventually settled with a 2.5% loss at $21.89 per ounce.
The Minutes from the latest Federal Open Market Committee meeting reflected much of what has already been communicated to the markets by the regional Fed presidents. Once again, several participants took note of tighter financial conditions while others pointed out rising fiscal risks associated with the stalemate in Washington.
The latest FOMC minutes from the Federal Reserve's meeting last month revealed a divisive committee, with the doves and hawks pleading their case. The committee expressed concern about shocks to the market place, including the U.S. budget impasse and looming debt ceiling. The majority of the FOMC members also reckoned the Fed would begin to scale back its monthly bond-buying program yet this year.
President Obama plans to nominate Federal Reserve Vice Chair Janet Yellen to the top spot of Chairman of the Fed. This news was not surprising but is still a bullish underlying factor for most markets, including the raw commodity sector and precious metals.
The partial U.S. government shutdown drags on and is in its ninth day with still no serious movement from either Democrats or Republicans.
Among economic report expected for the day, the weekly MBA Mortgage Index rose 1.3% to follow last week's downtick of 0.4%.
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