Daily Gold Update

Source:Dana Samuelson, American Gold Exchange

AustinGold closed the New York session unchanged from yesterday's close after trading in a tight $11 range in the overnight session. Following the release of the Fed July meeting minutes, gold edged slightly lower in electronic trading.

Fed minutes revealed that Fed members were reluctant to taking a predetermined course on future interest rate policy decisions and instead we taking a meeting-by-meeting approach going forward. In a split decision two Fed officials voted for a half-point rate cut while "several" were initially in favor of no rate cut at all. The final vote was 8 to 2 in favor of a 0.25% rate cut. Fed minutes reiterated Chairman Powell's post meeting press conference comments that the July rate cut was indeed a "mid-cycle adjustment".

The minutes shed further light into where the Fed stands in the current economic environment. Citing the need for flexibility due to the unknown outcome of some of the risks facing the economy, and the absence of clarity regarding when those risks may be resolved, Fed members opted to take a wait and see approach. Minutes justified the July 0.25% rate cut as more of a risk-management decision than as an economic stimulus decision, with uncertainty due to trade tariffs being their primary concern.

Committee members continued to view a sustained expansion of economic activity, strong labor market conditions, and inflation remaining near their 2% objective as likely outcomes going forward. Several participants were concerned that the inversion of the 10-year and 3-month yield curve, which had persisted for over two months, could foreshadow weaker economic activity in the future potentially requiring the Fed to reduce interest rates further. Members agreed that it was important to maintain optionality in setting the future target rate for the Federal funds rate.

At the Comex close: December gold remained unchanged at $1,515.70; September silver edged up $0.02 to $17.15; October platinum gained $5.30 to $858.10; and September palladium fell $24.20 to 1465.50 an ounce.