Gold has posted sharp gains in the Wednesday session. In North American trade, the spot price for an ounce of gold is $1360.15, up 1.60% on the day. In economic news, CPI declined 0.1%, shy of the estimate of 0.0%. This marked the first decline since May. Core CPI remained unchanged at 0.2%. Later in the day, the Federal Reserve will release the minutes of the March policy meeting.
Investor sentiment turned negative on Wednesday, as the rhetoric between the US and Russia has ratcheted higher. This has sent gold prices sharply higher. Tensions in the Middle East are high, as Syrian forces allegedly used chemical weapons against rebel positions last week, and a UN Security Council meeting ended inconclusively after Russia cast a veto on a US proposal to probe the attack. US President Trump has warned that a US response is on the way, and Russia has countered that it will respond to any US move. If Trump makes good on his promise, investors could lose their risk appetite and the markets could spiral downwards.
The markets are keeping a close eye on the release of the FOMC minutes. The minutes could provide the markets with some insights regarding the Federal Reserve’s monetary policy for this year. Will the Fed press the rate trigger three times this year, or four? The current Fed forecast calls for three rate hikes, but this could be revised upwards if inflation rises. If the FOMC minutes point to a hawkish stance from policymakers,
