Financial safety

Federal Reserve To Embark On Monetary Policy 'U-Turn'

The Federal Reserve has started its first monetary policy meeting of the year, and according to one fund manager, it will be the latest central bank to signal a dovish shift in its monetary policy which will ultimately drive gold prices higher.

The gold market has pushed to its highest level in seven months as prices hold above $1,300 an ounce. April gold futures last traded at $1,314.70 an ounce, up 0.39% on the day.

Gold’s move come as the Federal Reserve is expected to strike a dovish tone in its monetary policy statement and in central bank chair Jerome Powell’s ensuing press conference. Central bank officials, including Powell, have been hesitant to signal further tightening in monetary policy following its December hike. In two events at the start of the year Powell said that because of low inflation pressures, the Federal Reserve can be “patient” on interest rate hikes. According to media reports, the central bank could also signal a slowdown in its balance-sheet reduction program, which Powell has previously described as on auto-pilot.