The central bank said Wednesday that it will keep the target range for the federal funds rate between 1.5 and 1.75 percent.
Gold and silver prices held steady after the US Federal Reserve said it will leave interest rates unchanged and continued to signal that policy will stay on hold for the time being.
As of 3:00 p.m. EST on Wednesday (January 29), gold was trading at US$1,576.90 per ounce, while silver was sitting at US$17.56 per ounce.
In a unanimous decision, the central bank left the target range for the federal funds rate between 1.5 and 1.75 percent.
Following the Fed’s first policy meeting of the year, Chair Jerome Powell highlighted continued moderate economic growth and a “strong” job market.
“Labor market continues to perform well … we see strong job creation, we see low unemployment, very importantly we see labor force participation continuing to move up,” Powell said. “We believe the current stance of monetary policy is appropriate to support sustained economic growth, a strong labor market and inflation returning to our symmetric 2 percent objective.”
However, Powell also referred to the uncertainties that remain, including those posed by the new coronavirus, which he said the Fed is monitoring very carefully. The virus, which has killed more than a hundred people and infected thousands, has increased fears of an economic slowdown in China.
During uncertain times, investors tend to turn to safe haven assets such as gold and silver. The precious metals have been making gains so far this year, with many experts having a positive outlook for 2020.
“I think that if we keep going in the gold market, if the gold market continues to strengthen, we’ll see follow through in the silver market.”
At the same event, David Morgan of the Morgan Report told the Investing News Network that he believes US$1,550 has become gold’s new base, which means silver’s next critical level is US$20 per ounce.
“For this year I think we’re going to see at least a 20 percent gain in gold, which puts it around maybe the US$1,800 level, and I’d like to see a 30 percent gain in silver this year, which would put it over US$20.”
Morgan added, “If those two were accomplished, I think not only does it verify that we’re back in a bull market — which I’m convinced we are — but that the bull market has some steam.”
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.