Gold Prices See Little Reaction Following 'Patient' Fed Minutes

May 22, 2019

New York (May 22)  The gold market is seeing little reaction to relatively expected minutes from last month’s Federal Reserve monetary policy meeting.

The minutes showed that the U.S. central bank is doubling down on its patient approach and is in hurry to adjust monetary policy one way or another.

“In light of global economic and financial developments as well as muted inflation pressures, participants generally agreed that a patient approach to determining future adjustments to the target range for the federal funds rate remained appropriate,” the minutes said. “Participants noted that even if global economic and financial conditions continued to improve, a patient approach would likely remain warranted…”

Along with is “patient” approach to monetary policy, the minutes had a slightly optimistic tone on the global economic outlook.

“A number of participants observed that some of the risks and uncertainties that had surrounded their outlooks earlier in the year had moderated, including those related to the global economic outlook,” the minutes said.

Gold prices were relatively unchanged on the day ahead of the report have a have seen little momentum in initial reaction. June gold futures last traded at $1,274.50 an ounce, up 0.10% on the day.

According to some analysts, the minutes held now surprises, which is why many were discounting them well in advance. Many analysts have noted that there has been a significant-shift in sentiment as trade tensions have escalated between the U.S. and China.

Many economists have said that a rise in the trade war could be the factor that pushes the U.S. and global economies into a recession.

Looking at inflation, the minutes showed that the committee saw the recent drop in consumer price pressures as “transient.”

“Participants generally anticipated that a patient approach to policy adjustments was likely to be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective,” the minutes said.


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