Gold Price Rises, Dollar Declines as Fed Hints at Possible Price-Level Targeting

Washington (Nov 23)  The Federal Reserve has released the minutes of its latest policy meeting, sending the dollar lower and boosting demand for gold, as investors envision greater market volatility ahead. Consequently, gold prices posted solid gains in US trading Wednesday after the Fed minutes from the latest Federal Open Market Committee (FOMC) were deemed as too dovish to market participants. The US dollar slid despite the central bank saying interest rates would soon go up, as overall macroeconomic data was weaker than expected.

Investor demand for safe havens increased and gold gained the most as the investment appeal of its main competitor, US Treasury notes, tumbled.

Gold’s spot price was up 1.1 percent at $1,293.92/oz., whilst gold futures rose $10.50/oz., or 0.8 percent, to $1,292.20/oz.

The Fed minutes  showed policymakers are considering raising interest rates from the current gauge of 1.25-1.50 percent as economic growth is poised to accelerate. The report contradicted the Commerce Department data on domestic investment, stirring concern of a possible monetary policy mistake amongst investors.

Reuters

 

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