After taking out $1 800, gold investors focus on Fed’s next step

Fresh from cracking $1 800/pz, the global gold market wants to know what the Federal Reserve may do next to rescue the US economy, with minutes due later on Wednesday that may shed light on the central bank’s willingness to embrace yield curve control.

Futures held near the highest in more than eight years, with a focus on the central bank release and warnings about the coronavirus pandemic. On Tuesday, Fed chairperson Jerome Powell stressed that getting the virus under control was vital. Separately, infectious-disease expert Anthony Fauci said new US cases of Covid-19 could hit 100 000 a day, up from about 40,000 at present.

Gold’s ascent in 2020 has been underpinned by aggressive central bank action to counter the pandemic’s economic fallout, with US real interest rates already negative. The minutes of the Fed’s June 10 meeting may add detail on policy makers’ view on curve control, a strategy that involves using bond purchases to cap yields on certain maturities at a specific level.