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FOMC Meeting Minutes Didn’t Move Gold Significantly

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FOMC meeting minutes

The FOMC (Federal Open Market Committee) meeting minutes came out on Wednesday, November 18, 2015. New York Fed President William Dudley, Cleveland Fed President Loretta Mester, and Atlanta Fed President Dennis Lockhart remained hawkish on the rate hike, just as the October meeting had indicated.

Experts said that the first few headlines seemed to confirm that policymakers were nearing a consensus about a liftoff in December. But later, the details of the report showed a few members of the Fed’s rate-setting committee were still unsure about the economy’s ability to incorporate a hike in interest rates.

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The US Dollar Index, or the DXY currency, which measures the strength of the dollar against a basket of six major world currencies, remained at $99.71. Investors bid the dollar higher earlier in the session after hawkish comments from five regional Fed presidents. The DXY currency, however, ended the day in the red, falling 0.31%.

Gold traded almost flat, marginally rising 0.01% on Wednesday, November 18. In the graph below, you can see an almost inverse relation of gold to the US dollar.

As the US dollar rises, commodities priced in the US dollar become more expensive for buyers with other currency. So a rising dollar is unfavorable for precious metals priced in the US dollar. Gold touched a low of $1,062 per ounce on Wednesday, November 18, before settling at $1,087 per ounce.

Tracking other investments

Mining ETF investments had a green day on Wednesday as the VanEck Vectors Gold Miners ETF (GDX) and the Sprott Gold Miners ETF (SGDM) rose 3.1% and 3.9%, respectively. Mining companies Yamana Gold (AUY), Primero Mining (PPP), and Silver Wheaton (SLW) rose 7.3%, 5.7%, and 5.0%, respectively, on Wednesday, November 18.

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