Gold prices hit seven week high with Dollars at near 3-week low

Gold’s leg up on Friday came after Fed minutes released yesterday suggested that the U.S. economy will grow well below historical averages for the rest of the decade. “But I’d like to get closer to the meeting, which means another week and a half or more closer to that meeting in order to make that decision”, he said.

Weak economic figures may add to the load of central bank to defer the first rate increase in nearly ten years, following a weaker-than-projected non-farm payrolls report earlier this month and worries on the world economy.

Bullard said he didn’t see a problem of an asset bubble in the US economy.

Twitter was down 2.6% at US$30.06, after a report on Friday that the company was planning layoffs this week. In a speech in Washington to the National Association for Business Economics, Brainard said there was a risk-management argument to a policy of “watching and waiting”. The US central bank has kept interest rates near zero since the 2008 financial crisis.

The CME Group Fedwatch tool shows an implied probability of a very small 8 percent increase in the U.S. Federal Reserve’s interest rate during its meeting scheduled for October 28. Many had expected the first hike to occur in September.

Brainard also cited concerns about the global economic outlook. “But if that weakness persists, it could keep the Fed from any kind of significant rate increase for a few time”.

The reality is that no one – not even the 12 voting members of the FOMC – has any idea when rates will actually start moving higher. He did not rule out supporting a hike at the October meeting.

She said the expected divergence between the US and Europe and Japan on monetary policy had tightened financial conditions to the equivalent of a couple of rate increases. Their forecasts assume continued solid United States growth and labour-market improvement, which could be eroded if a weaker global economy saps U.S. exports or puts more downward pressure on prices. But he cautioned, “That view is not immutable and will respond to economic developments over time”.

Hedge funds and other money managers last week cut net bullish bets on the U.S. dollar to the least since September past year, helping drive the greenback to the biggest weekly decline since June.

“The only data supporting raising the Fed funds rate has been employment, which has begun to shrink in the last quarter”, Evan Lucas, a markets strategist at IG Ltd.in Melbourne, said in an e-mail to clients.