Why doubts about Fed tightening supportive for Gold?


NEW YORK (Scrap Register): Some doubts about how aggressively the Federal Reserve will tighten monetary policy have crept into the market, which is supportive for gold, said Commerzbank.

Analysts pointed out that the Wednesday release of minutes from the last meeting of the Federal Open Market Committee show that while many Fed members still expect a rate hike this year, several are concerned that the currently low inflation rate in the U.S. may turn out to be not temporary after all, and are therefore arguing for a slower approach.

In other words, doubts are clearly emerging in the market as to whether the Fed will really raise interest rates three times next year, as it was indicating just a few weeks ago.

If interest rates are raised less sharply, gold would become more attractive as an alternative investment, Commerzbank added.

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