-5 C
New York
Saturday, January 22, 2022

Gold eases from 2-week high as dollar pares post-Fed losses

Gold eases from 2-week high as dollar pares post-Fed lossesLONDON: Gold eased on Thursday from an earlier two-week high as the dollar recovered some ground after posting its biggest daily fall in 18 months following a more cautious than expected interest rate statement from the Federal Reserve.

Spot gold rallied to a peak of $ 1,177.46 an ounce and the dollar tumbled after the U.S. Federal Reserve signalled a slower pace of interest rate hikes and gave a cautious outlook for the U.S. economy.

It failed to maintain those gains, however, as the dollar rebounded from an early low to rise 0.3 percent against a basket of currencies.

Spot gold was down 0.3 percent at $ 1,163.95 an ounce at 1040 GMT.

Gold hit a four-month low this week and remains down nearly 2 percent on the year on expectations that higher interest rates could lift the opportunity cost of holding non-yielding bullion.

“Going into June, we’re still expecting a rate hike. The Fed has dropped the reference to patience, however it suggested that the hikes will be at a slower pace than expected,” Natixis analyst Bernard Dahdah said.

“The stronger the hikes, the more negative it would be for the price of gold.”

The Fed moved a step closer to raising rates for the first time since 2006, but downgraded its economic growth and inflation projections, signalling it is in no rush to push borrowing costs to more normal levels.

The U.S. central bank removed a reference to being “patient” on rates from its policy statement, while sounding a cautious note on the economic recovery. It also cut its median estimate for the federal funds rate and expressed concern over the strength of the dollar, which has risen 10 percent this year.

Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.24 percent to 749.77 tonnes on Wednesday – the first inflow since Feb. 20.

U.S. gold futures for April delivery were up $ 12.00 an ounce at $ 1,163.30.

Among other precious metals, silver was down 0.3 percent at $ 15.87 an ounce, while spot platinum was flat at $ 1,113.50 an ounce and spot palladium was down 1.2 percent at $ 770.72 an ounce.

Russia’s central bank has agreed “in principal” to sell some of its palladium stock to a fund of investors led by Russia’s Norilsk Nickel and two co-owners, Vladimir Potanin, its chief executive, said on Thursday.

Copyright Reuters, 2015

Related Articles


Please enter your comment!
Please enter your name here

Stay Connected

- Advertisement -

Latest Articles

Popular Articles