By Myra P. Saefong and Mark Decambre
Gold futures settled lower Wednesday, but then edged higher in electronic trade after minutes from the Federal Open Market Committee’s July meeting showed that central bank officials were split over the pace of future rate increases.
Ahead of the Fed minutes, December gold GCZ6, +0.73% fell $8.10, or 0.6%, to settle at $1,348.80 an ounce, pulling back after closing at $1,356.90 Tuesday to mark its best settlement since Aug. 4. After the release of the FOMC minutes, prices initially extended their losses in post-settlement electronic trading, but then bounced above the settlement price. Gold changed at $1,353.20 roughly half an hour after the release of the minutes.
September silver SIU6, +0.82% was at $19.705 an ounce in electronic trading, after settling at $19.648 an ounce, down 22.6 cents, or 1.1%.
At the July 26-27meeting, Fed officials were relieved their worst fears about the economy did not materialize but were divided on whether that meant they should quickly resume lifting interest rates, according to the minutes.
Higher interest rates can weigh on precious metals, which don’t offer a yield, making them less attractive to investors searching for richer-yielding securities.
“In the end, the Fed seems cautious, despite apparent ‘internal’ pressure to raise interest rates,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management.