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Gold make gains

Written by Business World, on 19th Feb 2015. Posted in Economy

article headlineGold extended gains to a second straight session on Thursday as minutes of the Federal Reserve's meeting showed U.S. central bank officials were cautious about raising interest rates too soon, hurting the dollar. Spot gold rose 0.1 percent to $1,214.10 an ounce by 0716 GMT. The metal closed up 0.3 percent on Wednesday, after dropping to a six-week low of $1,197.56 earlier in the session. Fed policymakers expressed concern last month that raising rates too soon could pour cold water on the U.S. economic recovery, and fretted over the impact of dropping "patient" from the central bank's rate guidance. The minutes from the Fed's Jan. 27-28 policy-setting meeting, released on Wednesday, show officials grappling to square solid U.S. economic growth with the weakness in international markets, as well as worrying about falling inflation expectations in the United States. Gold had come under pressure in recent months from expectations the Fed will raise interest rates as early as June, potentially lifting the dollar and hurting non-interest-yielding assets like bullion. Global equity markets advanced while the dollar pulled back following the release of the Fed minutes. Gold's failure to hold losses below $1,200 could mean some consolidation was in the offing, said some chart analysts. Traders were also keeping an eye on developments in Europe, where Greece is negotiating with its creditors to resolve a debt crisis. Greece is expected to ask on Thursday for an extension to its "loan agreement" with the euro zone as it faces running out of cash within weeks, but it must overcome resistance from sceptical partners led by Germany. With Greece's bailout programme due to expire in little more than a week, the government of leftist Prime Minister Alexis Tsipras urgently needs to secure a financial lifeline to keep the country afloat beyond late next month. A failure to reach an agreement could see Greece exiting the euro zone, potentially triggering safe-haven bids for gold, although markets believe a last-minute agreement will be negotiated. Liquidity is likely to be thin in Asia as several markets are closed for the Lunar New Year holiday. (Reuters) For more visit: www.businessworld.ie

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