Gold poised to log a 1-week high on Fed meeting minutes and a drop in the U.S. stock market

Gold futures headed toward their highest finish in a week on Thursday, finding support from declines in the U.S. stock market, following Federal Reserve meeting minutes out a day earlier that revealed a panel seemingly comfortable with its patient stance on interest rates.

June gold GCM19, +0.78% on Comex was up $9.70, or 0.8%, at $1,283.90 an ounce, on track for the highest settlement since May 16, according to FactSet data. Thursday Prices ended higher Wednesday and boosted that gain in the after-hours, when the minutes were released. The moves follow Tuesday’s finish at the lowest most-active contract settlement since May 2.

The minutes from Federal Open Market Committee’s April 30-May 1 meeting released on Wednesday revealed that the FOMC members agreed that their inaction could last for “some time.”

“Interest rates are steady, if not possibly going lower by year end,” said Jeff Wright, executive vice president of GoldMining Inc. told MarketWatch.

The FOMC may also “be forced to add to [the] balance sheet as [the] U.S./China Tariff dispute has entered into standoff phase and China’s appetite for U.S. Treasury issuance has begun to wain,” he said. “This is a net positive for a gold rebound.”

Gold’s gain Thursday also came as benchmark U.S. stock indexes moved sharply lower. The dollar index DXY, -0.15%  was a bit firmer at 98.141, which can pressure prices for dollar-denominated gold.

“Equity risk on momentum has retreated to full on risk off; could be ready for the sell in May and go away equity market through end of the month,” said Wright, which is also a positive for gold.

“I think gold is set up nicely right now for a real, no kidding rebound towards $1,300,” said Wright.

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