Spot gold extended earlier gains on Wednesday after the minutes of the Federal Reserve’s most recent policy meeting showed the central bank has begun detailing how it plans to ease the U.S. economy out of an era of loose monetary policy.
The minutes from the June 17-18 meeting indicate the Fed envisions using its overnight repurchase agreements in tandem with the interest it pays banks on excess reserves to set a ceiling and floor for its target interest rate.
Though no decisions have been announced, the discussion has become detailed enough for Fed officials to contemplate the proper spread between the two – mentioned in the minutes as 20 basis points. After the announcement, spot gold rose 0.8 percent to $1,329 an ounce. U.S. gold futures for August delivery settled $7.80 higher at $1,324.30 an ounce, logging its first daily gain in four sessions.