Yamana Gold Inc. (USA) (NYSE:AUY) made an impressive run on the bourses during the previous session after the Federal Reserve’s Chair Janet Yellen gave hint that they are in no hurry to hike rates. The Fed’s commentary spiked rally in the yellow metal, which recorded his highest weekly gain in the last two months amid expectations that lower rates are here to stay for longer.
Following the Yellen’s remarks, the US dollar recorded the sharpest weekly fall since 2011, which further restored interest in gold. According to Donald Selkin, who is a chief market strategist at National Securities Corp., the Fed will not push rate hikes early, which favored the gold and brought the dollar down. Yellen’s remarks were reflective in Gold Futures, which soared by 2.8% to $1,184.60 and helped gold retreat from the current year’s decline. Ahead of the Fed’s meeting held last Friday, traders were in the mode of exiting from precious metals as they projected steeper rate hikes.
Most accurate projection
While the Fed’s statement has eased pressure on gold, but according to Artur Passos, analyst at Itau Unibanco Holdings SA, nothing much has changed for the gold. He continues to project that gold will report third consecutive annual decline in 2015. Passos forecast matters as he is counted as one analyst, who predicted about the gold most accurately over the last two years. The Central Bank said that it would be “patient” on its decision to hike rates. It further said that they are confident that inflation will be brought to the target, and the labor market will improve. However, the Fed’s tone signals that the rate hike may not become a reality at least this year.
According to Michael Cuggino, fund manager at Permanent Portfolio Family of Funds Inc, the gold is still cheap for somebody, who would like to initiate a position in it. Amid all the possibilities, the stock of Yamana Gold Inc. (USA) (NYSE:AUY) climbed by nearly 5.50% to settle at $3.91.
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