Gold futures fall slightly after U.S. Fed meeting
Chicago (Jan. 28) Gold futures on the COMEX division of the New York Mercantile Exchange fell slightly on Thursday after the Federal Open Market Committee meeting did not result in a rate increase.
Gold futures climbed up early Thursday as the Federal Reserve's statement, released Wednesday, said the U.S. central bank will maintain the target range for the federal funds rate at 0.25 percent to 0.5 percent.
However, as the U.S. stocks opened higher Thursday, investors began their technical sell-off of gold futures, according to analysts.
Additionally, the price of the precious metal was put under further pressure as the market remains unsure of when the next rate hike, from a 0.50 rate to a 0.75 rate will occur. According to the CMEGroup's Fedwatch tool, the current implied probability of a hike from 0.50 to 0.75 is at 12 percent for the March meeting, and 20 percent at the April meeting.
Gold was prevented from falling further as the U.S. Dollar Index went down Thursday. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.
The precious metal, however, was given additional support as a report released by the U.S. Department of Commerce showed durable goods orders fell by 5.1 percent during the month of December. Analysts noted that this was worse than expected and that aircraft orders were a large part of the weakness.
As for the other data on Thursday, the U.S. Labor Department said the advance figure for seasonally adjusted initial jobless claims was 278,000 in the week ending Jan.23. It's a decrease of 16,000 from the previous week's revised level of 294,000. Analysts said this also extended some pressure on gold.
Silver for March delivery fell 22.7 cents, or 1.57 percent, to close at 14.232 dollars per ounce. Platinum for April delivery lost 14.2 dollars, or 1.61 percent, to close at 867.90 dollars per ounce.
Source: Xinhuanet
