Gold Prices Flat as Fed Considers Pause to Rate Hikes Cycle

Investing.com – Gold prices were flat on Thursday in Asia on reports that Federal Reserve might consider a pause to the rate hikes cycle.

for December delivery on the Comex division of the New York Mercantile Exchange were unchanged at $1,228.2 a troy ounce by 1:20 AM ET (06:20 GMT).  

MNI, citing “senior people at the Fed”, said that the central bank will consider a pause to the rate hikes cycle as early as spring. They said that a rate hike in December is all but a done deal, but indicated that the debate will become more lively beginning in March and certainly by June.

Fed Chairman Jerome Powell warned last week of slowing demand abroad, fading fiscal stimulus at home and the lagged economic impact of the Fed’s past rate increases, suggesting that a pause in tightening may well come in 2019.

On Thursday, Reuters reported that traders started to question if the central bank could continue to increase rates without risking a slowdown in the U.S. economy.

According to a Reuters poll, analysts expected three more increases next year, taking the federal funds rate to 3.00-3.25% by the end of next year, although the third rate rise is a close call.

“The Fed is widely expected to hike in December.. but this meeting is getting a lot more focus as market is looking for any change in forward guidance,” said Sim Moh Siong, currency strategist at Bank of Singapore.

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