Gold retreats from 3 week high

Yao said the Fed should set objective conditions that will trigger a rate hike, such as inflation, unemployment and risks of property and housing bubbles.

James Bullard, president of the St. Louis Federal Reserve, said in an interview with CNBC Monday that there is still a chance the Fed could lift interest rates at an October meeting.

The Treasury Department auctioned $20 billion in three-month bills at a discount rate of 0.005 percent, its lowest level ever and down from 0.055 percent last week.

Confident rate liftoff to occur later this year; voted last week to delay liftoff out of prudence.

Just to refresh, Fed Chair Janet Yellen said September 17: The outlook overseas appears to have become more uncertain of late, and heightened concerns about growth in China and other emerging market economies have led to notable volatility in financial markets. But it was nearly expected by traders who expected more volatility as investors continue to digest the Fed decision. The Fed next meets in October and again in December.

A statement from the meeting said that “recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term”.

“If the Fed does not hike at all this year and the ECB does not commit to extend quantitative easing yet, euro/US dollar could appreciate well above $1.15″, David Woo, head of global rates and currencies research at Bank of America, wrote in a research note.

“We still expect the SARB to hike 25 basis points in November, although risks are tilted in the direction of a later move”, Barclays said. It signaled a “dovish” or cautious approach to the timing on lifting the Fed’s benchmark interest rates from zero.

After <strong>the Fedstrong> stood pat on rates Thursday -but also suggested that it’s still aiming for a hike later this year-gold futures GCZ5, +1.81% rallied in the overnight <strong>tradingstrong> session and extended strong gains into <strong>Fridaystrong>. Asian shares followed Wall Street lower on Monday after the Fed’s decision to keep interest rates at record lows raised fresh concerns about growth globally, particularly in China.

The Dow Jones industrial average fell 185 points, or 1.1 percent, to 16,490 as of 11:18 a.m. Eastern time. Also on the list was the decline in oil prices. USA interest rates, it seems, are set to remain on hold – at least until the full impact and implications of China’s economic slowdown can be more fully assessed.