Gold Price Rallies to 3.5-month High on Release of Fed Minutes

The gold price has been hovering between $1,230 and $1,240 per ounce for most of the week, but on Thursday (February 23), a fire was lit under the yellow metal.
That day gold reached $1,251.41, its highest price since last November. And while it was back under $1,250 as of 4:22 p.m. EST, The Financial Express said that the yellow metal was still on pace for its biggest daily gain since February 6.
Comments made by the US Federal Reserve reportedly sparked the precious metal‘s price rise. The minutes from the Fed’s January 31 to February 1 meeting were just released, and they have “dampened expectations for an interest rate hike in March.”
Robin Bhar of Societe Generale (EPA:GLE) said that because of those circumstances, “[t]he dollar’s backed off, bond yields have backed off, and that’s given a bit of support for gold.”

The central bank says in the minutes that it may raise interest rates “fairly soon,” but also notes that it will adjust the pace of interest rate hikes in line with the US economy’s performance.
The economy of course, “could be swayed by the policies the [Trump] administration introduces in the months to come.” And thus far the new US government’s fiscal policy remains a “wild card.”
“Markets are hoping that we get some long awaited concrete detail on the new administration’s economic and fiscal policy,” Jeffrey Halley, senior market analyst at OANDA, told Reuters. There’s hope that those details may come on February 28, when Trump addresses Congress.
Andy Schectman, president of Miles Franklin, told the Investing News Network (INN) that Trump may “get what he wants, which is a weaker dollar.”
“If so, that means gold should outperform all expectations,” he continued.
However, though more certainty in the US could cap the gold price, elections in France and the Netherlands may help keep prices up. “Gold investors should be paying close attention to upcoming European elections,” Walter Pehowich of Dillon Gage Metals told The Financial Express.
It’s possible that France will exit the European Union if Marine Le Pen, leader of the French National Front party, wins the country’s upcoming election. That of course would spark safe-haven demand for the metal.

“This may in hindsight look like a one-day wonder,” Jonathan Butler at Mitsubishi (TSE:8058) told Reuters in a separate interview.
Opinions on the gold price clearly vary, and investors will need to watch for Trump’s Congress address next week and for the results of European elections. Still, the yellow metal’s year-to-date increase of 7 percent is surely encouraging.
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.