Gold Rises After Doubts Remain on Fed Rate Hike Plan

Gold futures rallied to a five-week high Thursday as the dollar continued to slide after minutes from the Federal Reserve’s December meeting unsettled investors’ expectations about the pace of interest-rate rises.

Gold for February delivery GCG7, +1.55% gained $13.50, or 1.2%, to $1,178.80 an ounce, setting it on track for its highest settlement since Nov. 29. On Wednesday, it added 0.3% to settle at $1,165.20 an ounce—the loftiest finish since Dec. 12, according to FactSet data.

The gains came after minutes from the central bank’s Dec. 13-14 meeting out Wednesday showed Fed officials are grappling with “considerable uncertainty” about the possible impact on the U.S. economy of President-elect Donald Trump’s fiscal stimulus plans.

Investors appear to be pulling back on their hopes for a more aggressive pace of rate hikes after Fed policy makers “pointed to a number of risks that, if realized, might call for a different path of policy than the currently expected,” according to the minutes.

via Marketwatch

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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