Federal Reserve officials expressed a view that it could become appropriate to hike the target range for the Federal funds rate "relatively soon," according to minutes of their November gathering released yesterday. In addition, several Fed committee members proposed that the economy is at or near full employment, or the level of unemployment is below inflation which becomes a concern.
Some members expressed concern about the recovery of economic growth and the probability of its occurrence because of the delay in raising interest rates. The U.S dollar was positively affected by such data and continued its gains ahead of thanksgiving.
The U.S. Dollar index, which measures the value of the dollar against six currencies, has risen by over 3% since the U.S. presidential election. The Dollar index touched 13-year high after unexpected U.S. durable-goods data was released and settled at 101.75 pips.
Also on Wednesday, the yellow metal fell to a nine-month low, negatively affected by a strong USD. The metal declined on the back of strong U.S. data that promoted a case for hiking interest rates in December. In addition, the U.S. dollar rose as jobless claims came in at a 43-year low, and remained below a consistent level with a tightening labor market. U.S. durable goods orders bounced in October.
Gold lost more than 10%, compared with a peak in the wake of announcing the results of the US elections two weeks ago. The precious metal has declined to the psychological level of $1,200 and is moving to $1,900. The yellow metal could decline further and touch the technical resistance level of $1,170 as a target.
OPEC members will meet in Vienna on 30th November, to discuss the details of a deal to curb production that the group has been trying to hammer out since last September. WTI settled at $48 and could jump to $50, if OPEC reaches an agreement to cut the oil output.
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