Gold and Silver Turn Lower After FOMC Minutes
On Wednesday, gold (NYSEARCA:GLD) futures for June delivery, the most active contract, dipped $10.20 to close at $1,367.40 per ounce, while silver (NYSEARCA:SLV) futures for July edged 2 cents higher to finish at $22.47.
Both precious metals received knee-jerk movements during the day as Federal Reserve Chairman Ben Bernanke told the Joint Economic Committee in Washington D.C., “A premature tightening of monetary policy could lead interest rates to rise temporarily but would also carry a substantial risk of slowing or ending the economic recovery and causing inflation to fall further.” However, he also said that concerns over “frothiness” and “bubbles” were rising and declined to rule out tapering before Labor Day.
The latest Federal Open Market Committee minutes were also released. The central bank stated, “A number of participants expressed willingness to adjust the flow of purchases downward as early as the June meeting if the economic information received by that time showed evidence of sufficiently strong and sustained growth; however, views differed about what evidence would be necessary and the likelihood of that outcome. One participant preferred to begin decreasing the rate of purchases immediately, while another participant preferred to add more monetary accommodation at the current meeting and mentioned that the Committee had several other tools it could potentially use to do so.”
Shortly after the minutes, the SPDR Gold Trust (NYSEARCA:GLD) fell 1 percent, while the iShares Silver Trust (NYSEARCA:SLV) edged slightly into the red before regaining ground. All three major stock indices also headed lower after the FOMC minutes.
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Disclosure: Long EXK, AG, HL, PHYS