Investing.com - Gold prices traded lower on Wednesday after the
Federal Reserve's July policy meeting minutes revealed that rate
hikes could come sooner rather than later if the job market
continues to improve.
On the Comex division of the New York Mercantile Exchange, gold
futures for December delivery traded at 1,290.10 a troy ounce
during U.S. trading, down 0.51%, up from a session low of $1,288.90
and off a high of $1,298.90.
The December contract settled down 0.20% at $1,296.70 on
Futures were likely to find support at $1,283.30 a troy ounce,
the low from Aug. 5, and resistance at $1,304.90, Monday's
The Federal Reserve voted to leave benchmark interest rate
unchanged at 0.00-0.25% and added it would cut its monthly
bond-buying program to $25 billion from $35 billion at its July
The Fed said that the overall economy is improving, though
slackness remains in the labor market despite growth, which
prompted monetary authorities to continue tapering its
asset-purchasing program by only $10 billion per policy
The Fed's stimulus bond-buying program is seen concluding around
October, and rate hikes are expected in 2015, though the timing of
the latter remains up in the air.
While some monetary authorities favored studying more data
before deciding, others felt action should come sooner rather than
"Many participants noted that if convergence toward the
Committee's objectives occurred more quickly than expected, it
might become appropriate to begin removing monetary policy
accommodation sooner than they currently anticipated," the minutes
released earlier Wednesday read.
"Indeed, some participants viewed the actual and expected
progress toward the Committee's goals as sufficient to call for a
relatively prompt move toward reducing policy accommodation to
avoid overshooting the Committee's unemployment and inflation
objectives over the medium term," the minutes added.
Gold prices fell on the news, as Fed bond purchases and
rock-bottom interest rates bolster the yellow metal's appeal as a
hedge to a weaker dollar.
Fed Chair Janet Yellen has said that the U.S. economy is
improving though monetary authorities continue to note slackness in
the labor market, though the minutes revealed some monetary
authorities feel that slackness may be absorbed in the near
"Many members noted, however, that the characterization of labor
market underutilization might have to change before long,
particularly if progress in the labor market continued to be faster
Meanwhile, silver for September delivery was up 0.16% at $19.443
a troy ounce, while copper futures for September delivery were up
2.65% at $3.170 a pound.
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