- The minutes from the Fed’s July meeting released Wednesday showed officials agreed on the need to dial back the pace of rate increases at some point, but what that point is, is less clear.
- Against this backdrop of uncertainty with respect to policy, gold headed for the first weekly decline in five weeks and bullion is trading near a two-week low.
Spot gold fell around 2.6% this week amid an ongoing discussion on whether the U.S. Federal Reserve will shift to less aggressive rate hikes, dampening demand for inflation hedges which bullion is typically viewed as.
The minutes from the Fed’s July meeting released Wednesday showed officials agreed on the need to dial back the pace of rate increases at some point, but what that point is, is less clear.
Fed minutes revealed that policymakers held divergent views, with St. Louis’s James Bullard urging another 75 basis-point move while Kansas City’s Esther George struck a more cautious tone, saying the case for rate rises remains strong but the pace is up for debate.
Lastest data showed that the U.S. labor market is still healthy with jobless claims falling for the first time in three weeks leaving the door open for the Fed to continue hiking aggressively which weighs on non-interest bearing bullion.
Against this backdrop of uncertainty with respect to policy, gold headed for the first weekly decline in five weeks and bullion is trading near a two-week low.
Gold has so far underperformed for this year, despite long-held beliefs that the precious metal is an effective hedge against inflation.
