© Reuters. Investing.com – Gold prices turned negative Wednesday, but remained near multi-month highs as the dollar pared losses despite the Federal Reserve signalling it was preparing to stop trimming its balance sheet later this year.
fell by $0.85, or 0.05%, to $1,344.15 a troy ounce, but remained near 14-month highs.
Gold prices struggled to hold gains as the dollar inched higher, even as expectations for more dovish policy action from the Fed were given boost.
The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.07% to 96.28, but remained above session lows of 96.12.
“Almost all participants thought that it would be desirable to announce before too long a plan to stop reducing the Federal Reserve’s asset holdings later this year,” the minutes showed.
The Fed has been allowing as much as $50 billion a month of maturing securities to roll off its balance sheet, which peaked at roughly $4.5 trillion in Jan. 2015, but has now narrowed to about $4 trillion.
In a sign that rates will remain lower for longer the minutes noted that participants viewed “the current target range for the federal funds rate for a time posed few risks at this point.”
In a weaker interest rate environment, investor appetite for gold strengthens as the opportunity cost of holding the precious metal decreases relative to other interest-bearing assets such as bonds.
Other precious metals remained in the green despite the rise in the dollar.
rose 0.77% to $16.09 a troy ounce, while rose 1.35% to $832.00.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Source: Investing.com
