Gold Prices Unfazed Following Comments From Fed’s Fischer

By Kitco News
Monday October 17, 2016 12:26

(Kitco News) - Gold prices continue to ignore comments from Federal Reserve Governor Stanley Fischer as he does not shed any new light on potential interest rate hikes.

Speaking at the Economic Club of New York, Fischer gave a broad, mostly theoretical, outlook on low interest rates and the U.S. economy. He highlighted three reasons why the Fed should be concerned about low interest rates, including that they make the U.S. economy more vulnerable to adverse shocks that could lead to a recession, threaten financial stability and weak economic growth.

“Those are three powerful reasons to prefer interest rates that are higher than current rates. But, of course, Fed interest rates are kept very low at the moment because of the need to maintain aggregate demand at levels that will support the attainment of our dual policy goals of maximum sustainable employment and price stability,” he said in his comments.

Gold prices were slightly positive to unchanged on the day, ahead of Fischer’s comments and have remained stable; December Comex gold futures last traded at $1,256 an ounce, up 0.04%.

During the question and answer period, Fischer said that right now the central bank is not “in trouble” when it comes to its current monetary policy as the U.S. economy hovers near full employment with inflation just below 2%. However, he added that if there is renewed pessimism in financial markets then the bank could be in trouble.