Gold gains support from weaker dollar after less-dovish Fed
By Asha Sistla (Reuters) - Gold prices gained on Thursday, helped by a weaker dollar and as investors looked for clarity on future U.S. interest rates after the Federal Reserve on Wednesday signaled a higher bar to further reductions in borrowing costs
By Asha Sistla
(Reuters) - Gold prices gained on Thursday, helped by a weaker dollar and as investors looked for clarity on future U.S. interest rates after the Federal Reserve on Wednesday signaled a higher bar to further reductions in borrowing costs.
Spot gold was up 0.2% to $1,497.30 per ounce at 11:24 a.m. EDT (1524 GMT), after falling to $1,484.16, a one-week low, in the previous session.
U.S. gold futures dipped 0.7% to $1,504.90 an ounce.
"The dollar has started to come off and provide some relief (to gold prices) and if so, you're going to see some buying come in, prices of gold will move higher," said Alex Turro, market strategist at RJO Futures.
"The outlook as far as Fed Chairman Powell and the Fed is concerned, you're going to be looking out to October. The committee was divided, the rhetoric really didn't provide a clear path moving forward as far as the economy is concerned."
The Fed cut interest rates for the second time this year on Wednesday to help sustain economic expansion, but signaled a higher bar to further reductions as the labor market remained strong.
Helping bullion, the dollar index dipped against a major basket of currencies, as it struggled to gain in the face of the less dovish Fed meeting.
Lower interest rates decrease the opportunity cost of holding non-yielding bullion.
"They cut rates, the messaging was a little bit more hawkish than the market is anticipating. A major portion of the market is expecting a cut in October or, at least one more before the year end," said Ryan McKay, a commodity strategist at TD Securities.
However, "longer term you still have overall dovish stance across all central banks."
Central banks from around the world face increasing pressure to offer monetary support as the U.S.-China trade war hurts global growth.
Gold also witnessed some safe haven demand after Iran warned the United States against any direct combat in the Middle East following an attack on Saudi oil facilities that Washington and Riyadh blamed on Tehran.
Separately, palladium climbed 2% to $1,625.79, hovering close to the record peak of $1,626.81 touched on Monday.
"Palladium is getting an extra bit of the bid as the market becomes less worried about the industrial outlook," TD Securities' McKay said.
"The overall optimism on trade has people less concerned on the industrial front but ultimately the positive precious metals environment continues throughout the whole bunch."
U.S. and Chinese deputy trade negotiators were set to resume face-to-face talks for the first time in nearly two months on Thursday.
Silver edged 0.1% higher to $17.76 an ounce, while platinum rose 0.9% to $938.96.
(Reporting by Asha Sistla in Bengaluru; Editing by Steve Orlofsky)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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