Gold Up In Most Currencies, Biggest Winner of Fed Dovishness
Gold prices are scoring strong gains in afternoon trading Wednesday, in the wake of a dovishly perceived FOMC statement that was released at 2:00 p.m. EDT. Gold prices were trading near steady just before the FOMC statement, but then rallied moderately in the immediate aftermath of the statement. The U.S. dollar index was trading modestly higher just before the FOMC statement was released, but has sold off sharply in afternoon trading, which has given the gold market a further boost. Fed Chair Janet Yellen's press conference that was still ongoing as of this writing was also deemed to favor the dovish monetary policy camp. April gold was last up $29.20 an ounce at $1,260.30.
Gold ticked lower on Thursday as the market took a breather after rallying 2.5 percent in the previous session following the Federal Reserve's decision to cut the number of planned interest rate hikes, adding to pressure on the dollar.
Spot gold slid 0.2 percent to $1,259.61 an ounce by 0035 GMT after notching its biggest one-day rally in five weeks on Wednesday to a high of $1,264 an ounce.
U.S. gold jumped 2.5 percent to $1,260.7 an ounce after settling down 0.1 percent in the last session prior to the Fed statement.
Asian shares gained early and the dollar was on the defensive after suffering substantial losses following the U.S. Federal Reserve's move to reduce the number of interest rate hikes planned for this year.
The U.S. central bank held interest rates steady after its two-day meeting, as expected. However, fresh projections from policymakers showed they expected two quarter-point rate hikes by year's end.
Gold is highly sensitive to the prospect of rising rates, which lift the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.
Reference: Reuters, Kitco
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