Gold price holds onto gains after FOMC keeps rates on hold

Gold remaioned supported on Thursday morning in London after the US Federal Open Committee (FOMC) on Wednesday kept the Federal Funds rate unchanged.

Spot gold was last at $1,332.35/1,332.75 per ounce, little changed from the previous close after surging to a two-week high of $1,342.15 on Wednesday. Trade has ranged from $1,331.35 to $1,335.25 so far on Thursday.

The FOMC kept interest rates at 0.25-0.5 percent as widely expected but laid down the groundwork for an increase in the coming months. The vote for a September was spilt, however. Three members of the policy board – Esther George, Loretta Mester and Eric Rosengren – dissented, preferring to raise rates now. This is an unusually large number.

Federal Reserve chair Janet Yellen at a post-meeting press conference acknowledged the stronger case for a rake rise but noted that it was reasonable to wait to see more progress towards its objectives.

Currently, only 14.5 percent of market participants foresee a rate increase at the FOMC’s November meeting, while the majority – almost 60 percent – anticipate the Fed moving in December, according to the CME Group FedWatch tool.

Earlier on Wednesday, the spot gold price had also received a boost after the Bank of Japan maintained its 0.1-percent negative interest rate and overhauled its monetary stimulus programme.

“The focus of the market is shifting from the Fed rate decision to the near-term outlook for rate hikes,” HSBC’s James Steel said. “Gold should also be impacted by the reported divisions at the FOMC.”

In the other precious metals, silver was last little changed at $19.745/19.765 per ounce. Platinum at $1,046/1,052 was just $1 higher but palladium at $687/695 was up $10.

(Editing by Mark Shaw)   

The post Gold price holds onto gains after FOMC keeps rates on hold appeared first on The Bullion Desk.

from The Bullion Desk http://ift.tt/2d1WWCf
via IFTTT