Gold Unchanged Following Hawkish FOMC Minutes

By Neils Christensen

Wednesday January 04, 2017 14:06

(Kitco News) - Gold is holding on to its gains despite some hawkish tones from the minutes of the December Federal Open Market Committee meeting.

The minutes from the December meeting, where the Fed raised interest rates for only the second time in 10 years, shows that some members could see a faster pace of tightening if the U.S. economy continues to improve, highlighted by continued declines in the unemployment rate, as a result of increased fiscal spending in a new Trump presidency.

“Almost all also indicated that the upside risks to their forecasts for economic growth had increased as a result of prospects for more expansionary fiscal policies in coming years,” the minutes said.

“Several members noted that if the labor market appeared to be tightening significantly more than expected, it might become necessary to adjust the Committee’s communications about the expected path of the federal funds rate, consistent with the possibility that a less gradual pace of increases could become appropriate,” the minutes added.

The tone of the meeting also helps to confirm the central bank’s outlook for the next year as the central bank sees the possibility of three rate hikes during the year.

Gold has managed to shake off the hawkish tones and is unchanged from its levels seen throughout the session. February gold futures last traded at $1,165 an ounce, up 0.26% on the day.