BMO: Fed dovishness 'should be supportive of gold'

New York (June 11)  Signals from the Federal Open Market Committee on the future of monetary policy Wednesday bode well for gold prices, said BMO Capital Markets. “The FOMC policy announcement that no change in policy rates is projected past the end of 2022 was perhaps only surprising in the unanimity of the call among voters,” BMO said. Policymakers also confirmed continuation of quantitative easing for some time, and Fed Chair Jerome Powell also called for more fiscal stimulus. “This should be supportive of gold, while industrial metals may benefit if this leads to a wider reflation trade,” BMO said. Comex August gold traded as high as $1,749.80 Wednesday, its strongest level in more than a week, before pulling back to $1,730.40 as of 7:36 a.m. EDT Thursday.

KitcoNews