Gold Price Talking Points
Fresh comments from a slew of Federal Reserve officials may influence the price of gold[1] as there appears to be a growing dissent at the central bank.
Fundamental Forecast for Gold: Neutral
The price of gold slipped to a fresh monthly-low ($1483) as the Federal Open Market Committee (FOMC)took steps to “help keep the U.S. economy strong,” and it seems as though the central bank will revert to a wait-and-see approach at its next interest rate decision on October 30 after providing “insurance against ongoing risks.”[2]
The minor adjustments to the Summary of Economic Projections (SEP) suggest the central bank is in no rush to reverse the four rate hikes from 2018 as Fed officials see the benchmark interest rate around 1.50% to 1.75% over the policy horizon, and the FOMC[3] may stick to the sidelines over the remainder of the year as Chairman Jerome Powell anticipates the US economy to “expand at a moderate rate.”
However, there appears to be a growing rift within the FOMC as three voting-members dissent against the recent action, and the divide may ultimately heighten the appeal of gold as it raises the risk for a policy error.
In turn, market participants may pay increased attention to the slew of fresh remarks from the 2019-voting members as New York Fed President John Williams, St. Louis Fed President James Bullard, Chicago Fed President Charles Evans, Kansas City Fed President Esther George, Governor Richard Clarida and Governor Randal Quarles are all scheduled to speak over the coming days.
A batch of mixed rhetoric may push market participants to hedge against fiat
