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.
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