Gold Prices See Little Reaction As Fed Raises Rates and Sees Moderate Growth

New York (June 14)  Gold prices are holding earlier gains, after the Federal Reserve raised interest rates, as expected, by 25 basis points but strikes a less dovish tone as it remains optimistic that inflation and economic growth would continue to pick up.

 In its statement, the U.S. central bank said that the nation’s economic activity has been “rising moderately so far this year.”

Ahead of the report, gold prices were trading in positive territory and are relatively unchanged, hitting new session highs. April Comex gold futures last traded at $1.278 an ounce, up 0.73% on the day

In its much-anticipated statement, the Fed said that it is raising interest rates within a new range between 1.00% and 1.25%, up from the previous range between 0.75% and 1.00%. However, analysts have noted that markets are looking past this meeting, focusing on the trajectory for the rest of the year.

In the latest interest rate projections, also known as the dot plots, the central bank’s median forecast is for interest rates to end t year around 1.4%, unchanged from March’s forecast. The Fed sees interest rates around 2.1% 2018 Also unchanged. In the long-term the central bank sees interest rates at 3.00%.

Source: KitcoNews