Gold 1% Higher After FOMC

Gold held recent gains to trade near a two-week high on Friday and was headed for its biggest weekly jump since January, after the Federal Reserve cautioned over its rate hike path and U.S. economic growth.

Spot gold was steady at $1,171.20 an ounce by 0730 GMT, near a two-week high of $1,177.46 hit on Thursday. The metal is up about 1 percent for the week – its biggest weekly gain since late January.

Gold had dipped to a four-month low earlier this week as concerns mounted over higher U.S. interest rates which could dent demand for non-interest bearing bullion.

The Fed, however, sounded a cautious note on the health of the economic recovery after its two-day policy meet this week, and slashed its median estimate for the federal funds rate and expressed concern over the strength in the dollar.

“Gold (is) still getting traction from dovishly perceived FOMC statement, short-covering and fresh purchases,” said HSBC analyst James Steel, referring to the Federal Open Market Committee.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza