The latest Fed minutes were released Tuesday afternoon and revealed that the Bernanke-led Federal Reserve considered a host of new monetary policy measures including further accommodative policies and adopting an inflation target.
Gold futures maintained the majority of their gains near $1,700 per ounce following the release of the Fed minutes, while the U.S. dollar remained slightly lower against a basket of foreign currencies.
Highlights from the minutes – which provide a recap of the Federal Open Market Committee (FOMC) meeting – follow:
It was noted that many central banks around the world pursue an explicit inflation objective, maintain flexibility to stabilize economic activity, and seek to communicate their forecasts and policy plans as clearly as possible. Many participants pointed to the merits of specifying an explicit longer-run inflation goal, but it was noted that such a step could be misperceived as placing greater weight on price stability than on maximum employment; consequently, some suggested that a numerical inflation goal would need to be set forth within a context that clearly underscored the Committee’s commitment to fostering both parts of its dual mandate.
A few members expressed interest in using language specifying a period of time during which the federal funds rate was expected to remain exceptionally low, rather than a calendar date, arguing that such language might be better to indicate a constant stance of monetary policy over time. However, members generally preferred to retain the existing forward guidance, at least for now.
A few members indicated that they believed the economic outlook might warrant additional policy accommodation. However, it was noted that any such accommodation would likely be more effective if it were provided in the context of a future communications initiative, and most of these members agreed that they could support retention of the current policy stance at this meeting. One member dissented from the policy decision on the grounds that additional monetary policy accommodation was warranted at this time.
With the Committee in the process of reviewing its monetary policy strategies and communication, and no additional accommodation being provided at this meeting, a few members indicated that they could support the Committee’s decision even though they had not favored recent policy actions.
The full version of the Fed minutes are available at the Federal Reserve’s website:
http://www.federalreserve.gov/monetarypolicy/fomcminutes20111102.htm
Alacer Gold’s Production Climbs, Raises Forecast
Alacer also noted that its Çöpler gold mine in Turkey continues to exceed the Company’s expectations, with production of 53,200 ounces for the quarter and cash operating costs decreasing by $126 per ounce to $259 per ounce. To date, the mined grade of the “world-class orebody has been significantly more than modeled,” with mined grade rising quarter over quarter by 66% to 2.07 grams per tonne of gold. Read the Full Press Release.
