Federal Reserve Chair Janet Yellen’s dovish message reignited a commodities rebound that pushed up everything from gold and copper to miners including Teck Resources Ltd. and Freeport-McMoRan Inc.
The Fed on Wednesday signaled it won’t raise interest rates as much this year as forecast in December amid weakening global economic growth, sending gold prices surging just after futures capped the longest slump since November.
A gauge of 14 gold miners climbed to the highest in more than a year, while the Bloomberg Americas Mining Index surged to an eight-month high. “With loose monetary policy and low rates, we’ll have a lot of money out there in the system and demand will be higher,” Bob Haberkorn, a senior market strategist at RJO Futures in Chicago, said in a telephone interview.
“The miners are benefiting from this because the trends on the physicals do look to be higher, whether it be gold, platinum, silver, copper or any of the other base metals for that matter.”
After advancing this year through early March as turmoil in financial markets helped boost demand for the metal as a store of value, gold’s rally had been sputtering.
Futures posted losses in seven of the past eight sessions, as signs of an improving U.S. economy rekindled speculation that rate increases were looming. In dialing back expectations, the Fed said economic and financial developments continue to pose risks.
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