Gold prices hold up after the minutes of the July Federal Reserve meeting

(Kitco News) – Gold sees little reaction as it holds critical support in excess of $ 1,500 an ounce after the minutes of the Federal Reserve monetary policy meeting in July showed that the Committee was reluctant to embark on a new cycle of easing.

The price of gold has been under moderate pressure for most of the day, as sales resumed in response to the July monetary policy meeting, in which the US central bank lowered its rates. interest for the first time in more than a decade.

The latest gold futures in December traded at $ 1,513.20 an ounce, down 0.12% this day

"Most participants considered the proposed flexibility of the policy of a quarter point at this meeting as part of a readjustment of the policy position, or a mid-cycle adjustment, in response to the changing economic outlook in recent months, "says the minutes.

The minutes also indicated that committee members were minimizing economic risks to the US economy.

"Several participants were in favor of maintaining the same objective at this meeting, believing that the real economy remained well placed," the minutes said. "These participants recognized that there were persistent risks and uncertainties about the global economy in general and international trade in particular, but felt that these risks had decreased during the interim period. . "

However, many economists have gone past the last minutes of monetary policy, as financial conditions have changed considerably. Since the July monetary policy meeting, fears of a global recession have increased dramatically.

Last week, gold prices reached their highest level in six years after inverting the 2-year / 10-year yield curve for the first time since the 2008 financial crisis.

Many economists focus on the last minutes of the central bank and look forward to the words of Federal Reserve Chairman Jerome Powell when he will speak Friday at the annual Jackson Hole Central Bank Symposium. Many economists and market participants expect it to announce a further rate cut in September.

Royce Mendes, chief economist at CIBC, said it was as though a lifetime had passed since the July monetary policy meeting.

"Since then, global markets and the global economy have changed a lot," he said. "Trade tensions have since intensified and may be enough to overthrow some of those responsible. Given the deterioration of confidence, it seems that the Fed is still on track to reduce rates next month. As long as the risks of a trade war remain under control, this could be on the part of the Fed, but downside risks have risen in recent weeks and could change this course. "