Gold and copper prices moved lower following the release of mildly hawkish minutes from the March meeting of the Federal Open Market Committee (FOMC).
The members of the Fed’s policy board are locked in what’s become an increasingly public debate on when will be the right time to raise interest rates, which have been near zero since December 2008. The current market consensus is that the first hike will happen sometime in the second half of this year.
“Several participants judged that the economic data and outlook were likely to warrant beginning normalization at the June meeting,” the FOMC minutes said.
“However, others anticipated that the effects of energy price declines and the dollar’s appreciation would continue to weigh on inflation in the near term, suggesting that conditions likely would not be appropriate to begin raising rates until later in the year, and a couple of participants suggested that the economic outlook likely would not call for liftoff until 2016,” they added.
In the moments after the release, gold for June delivery on the Comex division of the New York Mercantile Exchange traded at $1,198.20 per ounce, which was about $6 below the pre-FOMC level.
Comex copper May delivery was last at $2.7275 per pound, down 3.55 cents for the session and about one cent lower than before the release.
“The key sentence here was that some [members of the committee] were still considering a June rate hike,” a US-based trader said. “Given the weak tone [of recent data], I think there was a general assumption that June was off the table. But apparently that’s not the case.”
In the wider-markets, equities have shed nearly all of their gains, the Dow Jones industrial average and S&P 500 were last up just 0.04 and 0.02 percent, respectively, while the dollar strengthened, rising 0.32 percent to 1.0787 against the dollar.
The post Gold falls as divided Fed debates rate hike timing appeared first on The Bullion Desk.
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