How has gold reacted to FOMC minutes?

Gold price is mixed around the FOMC minutes that showed that Fed policymakers are divided on backing further rate hikes, however FOMC members still agreed that inflation risks are still unacceptably high, but the extent of further hikes is now made less certain.

Gold price has ranged between a low of $1,961, as at the time of writing, and a high of $1,965 so far around the event but has traveled in a wider range of between $1,956.77 and $1,985.39 on the day so far.

The Fed will now be driven by a combination of incoming data and credit conditions, Powell noted. “The assessment of the extent to which additional policy firming may be appropriate is going to be an ongoing one, meeting by meeting,” he said.

Last week, Powell indicated that rates might not have to rise as much due to tighter credit conditions after the banking sector turmoil. “The financial stability tools helped to calm conditions in the banking sector,” Powell said at the Thomas Laubach Research Conference Friday. After the meeting minutes were released, markets were projecting a 73% chance of a rate pause at the June meeting and a 27% chance of a 25-basis-point hike.