The Fed publishes minutes of the December meeting, the price of gold still down $ 40

(Kitco News) Gold remained close to daily lows after the Federal Reserve released the minutes of the December meeting, which showed broad support for the central bank’s current bond-buying program.

During the December meeting, the Fed kept rates unchanged close to zero, while President Jerome Powell stressed that the central bank will continue to buy assets until “the job is done.”

The minutes of the meeting revealed that all Fed officials supported the current pace of bond purchases.

“All participants judged that it would be appropriate to continue with these purchases at least at the current pace and almost all were in favor of maintaining the current composition of the purchases,” according to the minutes published on Wednesday. “A couple of participants indicated that they were open to weighting purchases of Treasury securities over longer maturities.”

It was said that the monthly pace of purchases of $ 120 billion will be maintained until there are “substantial advances” in the central bank’s employment and inflation targets.

There was no significant reaction to the news, with gold prices rising slightly but staying close to daily lows. February Comex gold futures were last traded at $ 1,913.80, down 2.08% on the day.

The Fed’s economic projections were updated during the December meeting as the central bank expected the US economy to grow by 4.2% in 2021, the unemployment rate to fall to 5% and inflation to arrive at 1.8%.

There were no significant changes in the point chart, and rates were expected to remain close to zero until 2023.

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

“Clearly there will be a need for help,” Powell said. “We have the flexibility to offer more accommodation … The numbers of coronavirus cases are so high and widespread that it looks like there will be an impact on the economy. It is seeing a bit of a slowdown now and during the first quarter of the next year “.

Powell added that the situation should improve by the middle of next year, when people will begin to feel comfortable going out and engaging in a wider level of activities. “During the second half of next year, the economy should perform strongly,” he said.

The minutes also showed that new adjustments could be made to the bond purchase program in the future.

“Some participants noted that the committee could consider future adjustments to its asset purchases, such as increasing the pace of securities purchases or weighting Treasury securities purchases relative to those with longer maturities, if they considered these adjustments appropriate, “the minutes said. dit.