Gold was back on its track after the U.S. central bank was alarmed by slow tightening of interest rate and the dollar tumbled to its lowest level in less than a month.
The Federal Reserve lifted U.S. interest rates for the second time in three months on Wednesday. It may be widely expected but it did not flag any plans to raise the pace of a rigid monetary policy as some traders have projected.
U.S. gold futures delivery ended up $26.40 to $1,227.10 after touching higher by $1,234 in the latest close for April, while the Spot gold edged up 0.59 percent to $1,225.88.
Gold is considered to be fragile to U.S. interest rate hikes as it increases the opportunity cost of holding the stubborn bullion whilst bolstering the priced dollar. The U.S. dollar index marked its one-month low amid Federal Reserve’s report and was down by 0.20 percent at 100.54.
Head of commodity strategy at Saxo Bank in Copenhagen Ole Hansen claims that genuine yields are stirred up after the prospects of a non-dovish rate hike; rather they got a non-hawkish rate hike that lacks change in the forward guidance and had restored gold today. He added that the polls in Holland didn’t increase the political risk in Europe as expected; it acted as a counter measure to a gold rally.
Meanwhile in the world's biggest gold-backed exchange-traded fund SPDR Gold Trust edged up 0.53 percent last Wednesday. So far the arrivals into the fund for the latest week have already removed last week’s discharge.
In addition, other precious metals were also on a positive track this week; Palladium edged up by 0.6 percent to $763.47 an ounce right after marking its highest since March 7 by hitting $777.90, while Platinum rose 0.53 percent at $953.99 an ounce. However the spot silver dropped 0.23 percent to $17.26 an ounce.