Gold Price Sells Off After Hawkish FOMC Minutes

New York (Jan 3)  Gold prices were moderately lower and hit new daily lows in early afternoon action Wednesday, in the wake of a hawkish FOMC minutes report. Some normal profit taking by the shorter-term futures traders was featured, after recent good gains in gold and silver. The markets in earlier U.S. trading were in pause modes after gold hit a 3.5-month high overnight. Silver prices scored a five-week high today. February Comex gold was last down $6.30 an ounce at $1,309.80. March Comex silver was last down $0.086 at $17.12 an ounce.

The U.S. economic highlight Wednesday was the release of the minutes of the last Federal Open Market Committee (FOMC) meeting held on Dec. 12-13. Traders parsed the statement for clues on the direction and timing of U.S. monetary policy in 2018—and deemed the minutes as favoring the hawkish camp on U.S. monetary policy. The members are still seeking a gradual rise in U.S. interest rates, with some members saying the new U.S. tax policy could raise GDP. Gold prices sold off after the minutes were released at 2:00 p.m. EST. Other markets did not see such significant reactions to the minutes.

World stock markets were mostly firmer Wednesday. U.S. stock indexes were higher and hit record highs today. Such did somewhat limit the upside in the gold and silver markets. Still, the ability of gold and silver prices to rally while the competing equities asset class is also rising, is impressive from the metals bulls’ perspective.

Tensions in Iran are still on the front burner of the market place. Demonstrators in that country are demanding an overthrow of the ruling government. Several protesters have been killed and the situation is not improving, according to reports. This matter is supporting the safe-haven gold and silver markets, as well as the crude oil market.

The key outside markets on Wednesday saw the U.S. dollar index higher on a corrective bounce from recent strong selling pressure. Meantime, Nymex crude oil prices were solidly higher and hit another 2.5-year high above $61.00 a barrel. The Iran demonstrations are supporting the oil market.