Gold jumps on dovish Fed statement
New York (Dec 18) Gold prices were much higher in Europe on Thursday, after the Federal Open Market Committee issued a policy statement at the conclusion of its two-day meeting that said it would be "patient" in hiking interest rates.
Spot gold was trading 1.8 per cent higher at $US1,210.24 a troy ounce in morning European trade.
After initially posting losses, the yellow metal was pushed up as the market interpreted the FOMC's statement as dovish -- which is bad for the dollar and so good for gold.
"The Fed statement was really more a victory for doves and the gold bulls," Phillip Futures investment analyst Howie Lee said.
Marex Spectron's head of precious metals, David Govett, said the market was watching for any comments out of Russia on how it might stem the ruble's decline and steady the economy.
Gold is known as a hedge against risk, and during times of uncertainty -- such as Russia's current economic crisis -- it tends to see an increase in buying activity, which buoys prices.
The rest of the precious metals also received a boost. Silver was up 2.9 per cent at $US16.186 an ounce, platinum was up 2.2 per cent at $US1,212.60 an ounce, and palladium was up 1.9 per cent at $US790.20 an ounce.