(Adds comment, details from FOMC statement, second byline,
By Frank Tang and Harpreet Bhal
NEW YORK/LONDON, June 18 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
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
"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
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
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)