The precious metal is heading for the biggest weekly advance July after United States central bankers opted once again to leave interest rates unchanged while reining in their outlook for future increases.
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“Investors are quite convinced that there will be, at most, one rate hike this year and most likely in December”. Pointing to the “roughly balanced” phrasing, she said, “this statement basically increased the chances of a December rate hike”.
Winer said he remains concerned how much more stocks can increase in the short-term, with the USA presidential election coming and third-quarter company earnings reports around the corner.
Holdings of the world’s largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares, rose another 6.5 tonnes on Thursday, data from the fund showed.
Trump has bashed the Fed for months for artificially propping up the economy.
Yellen also argued that monetary policy was not exceptionally easy, in spite of the low level of interest rates.
Spot gold dropped 0.2% to $1,334.41 an ounce by 4.11am GMT, but was on track for a weekly gain of almost 2%, the highest since end-July.
“It’s a very good thing that the [Fed] is not a body that suffers from group think”, Yellen said, referring to the concept of everyone in a group believing the same thing. “Volatility is probably the only certainty in the remaining months of the year”. Fed policymakers expect growth will be just 1.8 percent that year, after mediocre growth of 2 percent in 2017 and 2018. It also reduced its longer-run interest rate forecast to 2.9 percent from 3 percent. Yet inflation has remained below that level for more than three years.
Two other dissenters, Kansas City Fed President Esther George and Cleveland Fed President Loretta Mester have not comment on their decision to dissent as of Friday. Previously, the GOP presidential nominee alleged the Fed protracts on rate hike to pose the outgoing Obama administration in a better light in the public eye.
“This seems to have been one of the most divisive FOMC meetings in recent memory”, Ashworth said. That is the most dissents among the Fed officials this year.
Sentiment shifted, though, after Lael Brainard, a Fed board member and Yellen ally, laid out the case for delaying a resumption of rate increases for now. Second, the labor market figures might not adequately reflect the employment situation, with labor participation rate at its lowest since the 1960s, whilst underemployment and irregular jobs being increasingly prominent. A manufacturing gauge slid back into recession territory.
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IHS Markit said its preliminary September Composite Purchasing Managers Index (PMI) for the eurozone fell to 52.6 points from 52.9 points in August, although it still came in above the 50 points expansion point.
