Gold Lower as Fed Talks Positive About US Economy
New York (Jan 29) Gold prices continue to weaken on Thursday, following the Federal Reserve policy statement. In the European session, the metal is trading at a spot price of $1269.87. Gold has dipped 1.7% since early on Wednesday and is trading at a two-week low. On the release front, today’s key events include Unemployment Claims and Pending Home Sales.
On Wednesday, the Federal Reserve reiterated that it would be “patient” regarding the timeline for a raise in interest rates, which have been close to zero since 2008. However, the Fed also noted that the US economy was expanding at a “solid pace” and this vote of confidence helped the dollar post sharp gains against the euro. The markets expect the Fed to raise rates sometime during the year, so the “Fed rate watch” is sure to continue, as the markets look for clues as to when the Fed will make a move.
Earlier in the week, US durable good reports disappointed, as Durable Goods Orders plunged 3.4%, marking a 4-month low. There was no relief from Core Durable Goods Orders, which declined by 0.8%, its fifth drop in six readings. The markets had expected gains from both indicators. There was much better news later in the day, as CB Consumer Confidence jumped to 102.9 points, crushing the estimate of 95.3 points. New Home Sales followed suit, rising to 481 thousand, well above the forecast of 452 thousand.