Gold Prices Down But Fed Decision A Non-Event
(Kitco News)- The gold market is holding near session lows but is notseeing fresh selling pressure as the Federal Reserve leaves interest rates unchanged while keeping an optimistic tone on the U.S. economy and future interest rate hikes.
In a highly anticipated move, the Federal Reserve left itsFed Funds rate in a range between 1.75% and 2%. On the economy, the centralbank said that activity “has been rising at a strong rate.”
"Risks to the economic outlook appear roughly balanced," the statement reiterated.
Gold prices were under pressure ahead of the decision and isrelatively unchanged in initial reaction. December gold futures last traded at$1,227.60 an ounce, down 0.47% on the day.
On the inflation front, the central bank said that theycontinue to expect inflation to reach a sustainable 2% over the medium term. Economists have notedthat there is not much for markets to chew on in the statement.
Currently markets are pricing in a more than 90% chance thatthe Federal Reserve raises interest rates in September.
Avery Shenfeld, senior economist at CIBC Markets said thatthere is nothing for markets to think about and recommended that traders justcarry on with their day.
“Nobody was expecting the Fed to raiserates today, and nobody was expecting the committee to back away from its plansfor further hikes ahead. And everbody can therefore pat themselves on the backfor being right, as the central bank stuck to the expected script,” he said. “Oryou could say, the last script, since the wording of the statement wasvirtually identical to the prior one.”
By Neils ChristensenFor Kitco News
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