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Precious Metals Under Pressure After FOMC Minutes

August 21, 2019 at 20:53 by Vladimir Vyun

Precious metals were under pressure after the monetary policy minutes released by the Federal Open Market Committee today. The US dollar gained after the release. Consequently, dollar-priced commodities came under pressure. Prices for gold, silver, and palladium declined but platinum managed to avoid losses.

The FOMC released minutes of its July policy meeting at which the range for the federal funds rate was lowered by 25 basis points. They revealed that, while there were policymakers who would want to cut the rate even more, there were also others who thought that an interest rate cut is not warranted. Furthermore, the minutes did not show a plan for aggressive monetary easing in the future. The notes stated:

In their discussion of the outlook for monetary policy beyond this meeting, participants generally favored an approach in which policy would be guided by incoming information and its implications for the economic outlook and that avoided any appearance of following a preset course.

The minutes said further:

Members generally agreed that it was important to maintain optionality in setting the future target range for the federal funds rate and, more generally, that near-term adjustments of the stance of monetary policy would appropriately remain dependent on the implications of incoming information for the economic outlook.

Futures for delivery of gold in December declined 0.24% to $1,512.10 per troy ounce as of 20:49 GMT on COMEX today. September silver fell by 0.28% to $17.10 per ounce. Spot price for palladium dropped as much as 1.18% to $1,472.54 per ounce while platinum gained 0.36% to $852.63 per ounce.

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