PRECIOUS-Gold edges up after Fed statement

Wed Jun 18, 2014 2:57pm EDT

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(Adds comment, details from FOMC statement, second byline,
dateline)
    By Frank Tang and Harpreet Bhal
    NEW YORK/LONDON, June 18 (Reuters) - Gold edged up on
Wednesday after the Federal Reserve hinted at a slightly faster
pace of interest rate increases next year but slashed its
forecast for U.S. economic growth this year, lifting bullion's
safe-haven appeal.
    After a two-day policy meeting, the central bank slashed its
forecast for U.S. economic growth to a range of between 2.1
percent and 2.3 percent from an earlier forecast of around 2.9
percent, but expressed confidence the recovery was largely on
track.
    "The growth forecast reduction suggested that the Fed may
not be in a hurry to accelerate tapering," said James Steel,
chief metals analyst at HSBC.
    Spot gold was up 0.2 percent at $1,273.40 an ounce by
2:34 p.m. EDT (1834 GMT), after trading in a narrow $9 trading
range. 
    U.S. COMEX gold futures for August delivery settled
up 70 cents at $1,272.70 an ounce, with trading volume less than
80,000 lots, about 45 percent below the 30-day average,
preliminary Reuters data showed.
    The Fed also reduced its monthly asset purchases from $45
billion to $35 billion, but suggested rates eventually would be
lower than it had indicated previously. 
    Gold market participants have been monitoring the Fed's
policy statements for clues on when it might begin raising
interest rates, a move likely to weigh on bullion, which does
not offer its holders interest or dividends.  
    A high reading for U.S. inflation on Tuesday raised
expectations the Fed might signal a sooner-than-expected rise in
interest rates. Tightening rates would also lift the dollar and
put pressure on dollar-priced commodities like gold.
 
    Gold hit a three-week high of $1,284.85 on Monday due to 
volatility sparked by violence in Iraq, but
prices have dropped since then. Gold is up nearly 2 percent so
far in June. 
    Reflecting bearish investor sentiment toward bullion,
holdings in the world's largest gold-backed exchange-traded
fund, SPDR Gold Trust, fell 0.26 tonne to 782.62 tonnes on
Tuesday, a second straight day of declines.
    The fund posted its biggest outflow since mid-April on
Monday. 
    Among other precious metals, silver rose 0.6 percent
to $19.80 an ounce. Platinum rose 1 percent to $1,446.90,
and palladium gained 1 percent to $821.75 an ounce. 
    Platinum group investors digested news that Anglo American
Platinum and other companies confirmed that a large
number of employees had returned to South Africa's platinum belt
after spending the strike period elsewhere. 
    
2:34 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
               SETTLE   CHNG  CHNG                       VOL
US Gold AUG   1272.70   0.70   0.1  1266.50 1276.00   77,356
US Silver SEP  19.821  0.045   0.2   19.710  19.870    6,706
US Plat JUL   1450.80   7.70   0.5  1438.50 1464.00   12,552
US Pall SEP    822.65   5.95   0.7   817.25  834.50    4,274
Gold          1273.40   2.21   0.2  1266.60 1274.50         
Silver         19.800  0.110   0.6   19.700  19.820
Platinum      1446.90  14.40   1.0  1438.70 1460.00
Palladium      821.75   8.45   1.0   818.20  831.70
TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
               CURRENT   30D AVG  250D AVG   CURRENT     CHG
US Gold         78,493   147,571   165,114     13.09   -0.05
US Silver       46,572    49,807    55,340     17.72    0.18
US Platinum     15,935    14,585    12,336     17.38   -0.36
US Palladium     4,319     9,189     5,899     21.01    0.01

 (Additional reporting by A. Ananthalakshmi in Singapore;
Editing by Dale Hudson, Jane Baird and Dan Grebler)
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