Gold prices poke back below $1,200 as mixed Fed signals leave dollar with slim gain

London (Sept 27)  Gold prices were little changed under the closely monitored $1,200 line on Thursday, after a mixed response to the Federal Reserve’s widely expected decision Wednesday to raise a key interest rate for the third time this year but a less certain pace for rate changes moving forward.

The central bank raised its target for its benchmark lending rates to a range between 2% and 2.25% and signaled it was prepared to increase again in December, as it also altered language that could mean a slowing in the pace of future increases.

“A rate hike was a done deal yesterday but the Fed has created some sort of ambiguity in the market about their future monetary policy. This saved the massive selloff in the gold price,” said Naeem Aslam, chief market analyst at Think Markets. “The Fed balanced their hawkish statement by mentioning that the committee is a little less optimistic about the long-term future outlook and this part alone was enough to keep the dollar index in check.”

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