Gold maintained gains after Federal Reserve meeting minutes showed officials saw the economy moving toward conditions that would support an interest-rate increase, while also expressing concerns on consumer spending and Greece.
Members of the Federal Open Market Committee “saw economic conditions as continuing to approach those consistent with warranting a start” to rate increases at some point, according to minutes of June 16-17 meeting. All members but one “indicated that they would need to see more evidence that economic growth was sufficiently strong.”
Gold dropped in the past four quarters, the longest slump since 1997, on speculation the Fed will increase U.S. interest rates. Higher rates curb gold’s appeal because the metal doesn’t pay interest or offer returns like other assets such as bonds and equities.
“The June Fed minutes look dovish, with ‘many’ concerned about Greece and ‘many’ wanting more signs of strong growth for liftoff,” Tai Wong, the director of commodity-products trading at BMO Capital Markets Corp. in New York, said in a telephone interview. “The market will remain split on a September rate hike.”
Gold for immediate delivery rose 0.7 percent to $1,263.19 an ounce at 2:17 p.m. in New York, according to Bloomberg generic pricing. Earlier, the metal touched $1,147.36, the lowest since March 18.
The U.S. central bank’s benchmark interest rate has been near zero percent since 2008.
Silver also maintained gains.