Gold price lifts slightly as greenback weakens
London (Apr 30) Gold prices were slightly higher on the London spot market Thursday as the dollar softened following the release of the Federal Open Market Committee statement.
Spot gold was trading up 0.2 per cent at $US1,206.77 a troy ounce in morning European trade.
With market consensus now that the US Federal Reserve is increasingly likely to delay a rate rise until September, the upward potential of the US currency may be capped.
However, some market participants don't see the FOMC statement as having deviated far from expectations. As a result, the outlook for gold trading is seen to remain neutral.
"The dollar may look to soften from here, up till June possibly, [while] gold looks resilient and continues to stick [above] $US1,200," Philip Futures investment analyst Howie Lee said in the wake of the FOMC statement.
The greenback was down against a basket of currencies, including the euro (down 0.8 per cent) and sterling (down 0.2 per cent).
Gold is a dollar-denominated commodity, therefore prices rise when the US currency weakens as it makes the metal cheaper to buy for those holding other currencies.
"Unless another catalyst emerges, this could mean continued range-trading [for gold] up ahead," UBS said.
All the other precious metals were boosted by dollar weakness. Spot silver was up 0.6 per cent at $US16.654 an ounce, spot platinum was up 0.3 per cent at $US1,153 an ounce and spot palladium was up 0.4 per cent at $US784.34 an ounce.