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(Kitco News) – Gold prices remain under pressure, but within their recent range, as the Federal Reserve remains firm on monetary policy, even as it continues to signal that they are ready to do more if necessary.
Thursday, as expected, the Federal Reserve left interest rates unchanged in the zero-limit range, but noted that economic activity has moderated since its last meeting in December.
“The COVID-19 pandemic is causing enormous human and economic hardship in the United States and around the world. The pace of recovery in economic activity and employment has moderated in recent months, with weakness concentrated in the sectors most affected by the pandemic, ”the statement said.
In the central bank’s latest monetary policy statement, it continued to reiterate uncertainty in economic activity. However, it did not provide any new guidance on monetary policy.
“The trajectory of the economy will depend significantly on the course of the virus, including the advance of vaccines. The ongoing public health crisis continues to weigh on economic activity, employment and inflation, and presents considerable risks to the economic outlook, ”says the statement.
April gold futures traded for the last time at $ 1,849.30 an ounce, down 0.3% on the day.
Although economists and market analysts had not expected to see any significant announcements from the Federal Reserve, speculation has grown that the central bank might start looking at controlling the yield curve as US bond yields continue to hover around 1%, its highest levels in a year.
Avery Shenfeld, senior economist at CIBC noted that the Fed’s last decision was a non-event with “nothing to see here”.
“The Fed will want to see more details about the fiscal stimulus and vaccination before rethinking. This includes keeping the rate of funds unchanged and keeping pace with your purchases of Treasury bills and agency bonds. Nothing for the markets to react here, ”he said.
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