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Gold Steady Despite Hawkish Fed

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After pushing above $1,200 an ounce and hitting its highest levels since late November, gold could struggle as two new Federal Reserve voting members remain optimistic on the U.S. economy and see the possibility of three rate hikes this year.

Thursday, in a speech in Malvern, Penn., Philadelphia Federal Reserve President Patrick Harker said that the U.S. economic growth is robust and he sees the possibility of three rate hikes this year.



“All in all, things are looking good. The labor market is strong and we’re creating jobs at a good pace,” he said. “Inflation is moving back up to our 2% goal, and growth is solid. We’re starting 2017 off on a good foot.”

Harker also acknowledged the central bank’s limitations on economic growth, adding that governments at all levels need to do their part.

“I’ve said it before, and it’s worth repeating, that monetary policy is a fairly limited set of tools with a fairly limited reach. We will respond to changes in the economy with moves in the federal funds rate, and we can do a very good job of creating the conditions that are consistent with economic growth. But the kinds of policies that will deliver that growth — employment programs, development, taxation, and trade policy — is up to elected officials at the local, state, and national levels,” he said.

via Kitco

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza

@alfonso_forex

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