Gold Drops Awaiting Fed FOMC Minutes

Gold and silver futures fell for the first time in four sessions as speculation mounted that the Federal Reserve is moving closer to boosting U.S. interest rates for the first time since 2006.

Holdings in the SPDR Gold Trust, the world’s largest exchange-traded fund backed by the metal, dropped yesterday to the lowest since September 2008. Minutes from the Fed’s latest meeting will be released today.

Gold dropped 10 percent in the second half of 2014 as inflation remained muted and the dollar surged after the economy expanded in the U.S. Companies added 241,000 jobs in December, topping estimates by analysts, ADP Research Institute data showed today.

“The ADP number is another indication that the economy is growing,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview. “The market is nervous ahead of the Fed minutes, and the text will indicate how hawkish the Fed members are.”

via Bloomberg

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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