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Gold & Silver Remains Under Pressure from FOMC Minutes

August 22, 2019 at 19:56 by Vladimir Vyun

Gold and silver extended yesterday’s decline today. Copper joined the decline but platinum and palladium managed to rally.

Markets continued to digest the monetary policy meeting minutes released by the Federal Open Market Committee yesterday. Traders were hoping to see signs that the FOMC plans aggressive monetary easing. Instead, the minutes showed that the interest rate cut in July was “mid-cycle adjustment”, not the start of a prolonged easing cycle. Furthermore, the notes added that monetary policy is not on “a preset course”, suggesting that a rate cut in September is not guaranteed.

Yet it looks like markets are still betting on monetary easing from the Federal Reserve. The CME FedWatch page shows more than 90% probability of a 25 basis point cut in September. Furthermore, it shows almost 80% chance of another cut by the end of the year.

Now, markets wait for tomorrow’s speech of Fed Chairman Jerome Powell. Many investors still hope that he will signal about a reduction of interest rates in the immediate future.

December futures for delivery of gold dropped 0.49% to $1,508.30 per troy ounce as of 19:49 GMT on COMEX today. Silver slid 0.69% to $17.17 per ounce. Copper tumbled 0.95% to $2.5675 per pound. At the same time, spot price for platinum advanced 0.71% to $858.84 per ounce, and palladium climbed 1.13% to $1,488.42 per ounce.

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