Precious Metals Gain Ahead of Fed Meeting

Gold prices rose for the third consecutive session on Monday, reaching a more than two-week high of $1,953.40 per ounce. The yellow metal gained 0.4% as investors awaited the outcome of the U.S. Federal Reserve’s policy meeting this week.

The Fed is expected to provide clues on its plans to taper its bond-buying program and its outlook for interest rates amid rising inflation and slowing economic growth. Some analysts believe that the Fed will delay its tapering announcement until November or December, which could support gold prices in the short term.

Gold is often seen as a hedge against inflation and currency debasement, but it also tends to lose appeal when interest rates rise, as they reduce the opportunity cost of holding non-yielding assets.

Precious Metals Gain Ahead of Fed Meeting
Precious Metals Gain Ahead of Fed Meeting

Silver and platinum also advance

Silver and platinum also posted modest gains on Monday, while palladium edged lower. Silver for December delivery rose 0.5% to $23.498 per ounce, its highest level since Sept. 6. Platinum for October delivery added 1% to $938.30 per ounce.

Silver and platinum are both used in industrial applications, such as electronics, automobiles, and renewable energy. They benefit from the recovery in global demand and the transition to a low-carbon economy.

Palladium, however, fell 0.7% to $1,244 per ounce, after hitting a 10-month high of $1,259.50 on Friday. Palladium is mainly used in catalytic converters for gasoline vehicles, which are facing supply chain disruptions and lower demand due to the shift to electric vehicles.

US Mint bullion sales remain unchanged

The U.S. Mint did not report any change in its bullion sales on Monday. The Mint sells gold, silver, platinum, and palladium coins and medals to authorized purchasers, who then resell them to investors and collectors.

According to the Mint’s website, the bullion sales for September so far are as follows:

  • 12,000 ounces of American Eagle gold coins
  • 10,000 ounces of American Buffalo gold coins
  • 1.502 million ounces of American Eagle silver coins
  • No sales of American Eagle platinum coins

The Mint has been struggling to meet the high demand for its bullion products this year, due to limited supplies of blanks and production capacity. The Mint has also suspended some of its numismatic products, such as proof sets and commemorative coins, to focus on bullion production.

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