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BMO: growing Fed balance sheet to underpin gold, silver prices

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(Kitco News) - A “green light” for the U.S. Federal Reserve’s balance sheet to continue growing should keep underpinning gold and silver, said BMO Capital Markets. Analysts said Wednesday’s release of minutes from the last meeting of the Federal Open Market Committee offered little new on Fed policy. However, policymakers did talk about possible changes on forward guidance, becoming outcome-based, such as stating explicitly that the target rate for the Federal funds rate would not change until certain unemployment or inflation levels are achieved or a specific time length has elapsed. “With a balance sheet given a green light to grow much further and lots of options on the forward-guidance front, this should continue to be supportive of gold and silver prices,” BMO said.

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