Spot gold gained 0.5 percent to $1,318.31 per ounce as of 0625 GMT, after touching its highest since Feb. 28 at $1,319.02 earlier in the session. U.S. gold futures jumped 1.3 percent to $1,318.40 an ounce.
· Having downgraded the U.S. growth, unemployment and inflation forecasts, the Fed brought its three-year drive to tighten monetary policy to an abrupt end, abandoning projections for any interest rate hikes this year.
“The Fed was even more dovish than expected and that added to concerns that U.S. growth, and therefore global growth, is hitting a patch of weakness,” said Kyle Rodda, a market analyst with IG Markets in Melbourne.
“U.S. dollar is well off its highs from yesterday and the Treasury yields are coming down which means going into bonds or assets of that nature yields less and gold becomes more attractive.”
· The dollar fell sharply and U.S. Treasuries rallied after Fed’s decision on Wednesday, taking the benchmark 10-year yield to a 14-month low .
· “We remain optimistic on (gold’s) safe haven appeal as global economic indicators have pointed towards flagging global growth prospects and heightened geopolitical risks in the current term,” Philip Futures analyst Benjamin Lu said in a note.
· UK Prime Minister Theresa May made an impassioned appeal to British lawmakers to support her on Wednesday after the European Union said it could only grant her request to delay Brexit for three months if parliament next week backed her plans for leaving.
· Gold Price Forecast Brightens amid Drop in US Treasury Yields
Gold price action today produced a bullish outside engulfing bar on the daily timeframe (price closed at 1312.34, clearing the prior day high of 1310.83), concurrently seeing price close back above the daily 8-, 13-, and 21-EMA envelope. The combination of a strong candle and momentum indicators accelerating to the topside may bode well for Gold prices in the near-term.
Even though Gold prices pulled back at the end of February, pullback saw the March low establish a “higher low” than the January swing lows; the series of higher lows is coming above the 61.8% retracement of the entire2018 high-low range. In the immediate term, more gains look increasingly possible; a move below the March FOMC meeting day low (1298.53) would negate optimism.
· Gold daily chart
Gold is taking the bids around a 3-week high of $1319 during early Thursday.
Having successfully breached 50-day simple moving average (SMA) figure of $1305.60, the yellow metal also crossed $1317 intermediate halt and is now progressing towards February 21 low of $1321.
Should prices rally beyond $1321, there are multiple resistances around $1330 and $1337 whereas a descending trend-line stretched since April 2018 can challenge bulls at $1345.
Meanwhile, the bullion’s slip under $1305.60 can recall $1300 on the chart whereas an upward sloping support-line that joins November – March lows, at $1290, could gain market attention afterward.
Additionally, the quote’s downturn under $1290 might require validation of the 61.8% Fibonacci retracement level of January to August 2018 south-run, at $1287, in order to aim for $1280 and $1276.
· Among other precious metals, spot palladium rose 0.3 percent to $1,608.46 per ounce, after touching an all-time high of $1,619.81 earlier in the session.
The risk of a ban on export of precious metals’ scrap and tailings from major producer Russia added to concerns in an already tight market and pushed prices to record levels, analysts said.
The potential ban also helped platinum mark its highest level since March 1 at $871.25. The metal was on track for a fifth straight session of gains, rising 0.8 percent to $866 per ounce.
Silver, meanwhile, gained about 0.7 percent to $15.55 an ounce.
Reference: Reuters, Daily FX, FX Street
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