Fed publishes minutes of the December meeting, with a lower gold price of $ 40

(Kitco News) Gold remained near daily lows after the Federal Reserve released its December minutes, which showed broad support for the current central bank bond-buying program.

During the December meeting, the Fed kept rates unchanged at zero, while Chairman Jerome Powell stressed that the central bank will continue its asset purchases until ‘the job is done well’.

The minutes of the meeting revealed that all Fed officials supported the current bond purchase of bonds.

“All participants judged that it would be appropriate to continue the purchases at least at the current pace, and almost all preferred to maintain the current composition of purchases,” the minutes published on Wednesday read. ” A few participants indicated that they were willing to weigh purchases of treasury bonds after longer maturities. ‘

It is said that the monthly rate of purchases of $ 120 billion is maintained until there has been significant further progress with the central bank’s employment and inflation targets.

There was no significant reaction to the news, with gold prices rising slightly but still close to their daily lows. Gold futures in February last traded at $ 1,913.80, which was 2.08% lower on the day.

The Fed’s economic forecasts were updated during the December meeting, and the central bank now expects the US economy to grow by 4.2% in 2021, unemployment to fall to 5% and inflation to 1.8%. come.

There were no significant changes in the spot, and rates are expected to remain until 2023.

Powell also noted that the situation will be difficult over the next four to six months.

“Clearly, help will be needed,” Powell said. ‘We do have the flexibility to provide more housing … The number of coronavirus cases is so high and widespread that it looks like the impact on the economy will take place. You see that now and during the first quarter of next year there is a slowdown. ‘

Powell added that the situation will have to improve in the middle of next year when people will start to feel comfortable engaging in a broader level of activity. “During the second half of next year, the economy should perform strongly,” he said.

The minutes also showed that further adjustments to the mortgage program could be made in the future.

“Some participants have noted that the committee may consider future adjustments to its asset purchases, such as increasing the rate of securities purchases or weighing treasury bond purchases against those that remain longer, if such adjustments are deemed appropriate,” he said.