Gold prices finished lower on Wednesday, giving back nearly all of their gain from a day earlier, then climbed in electronic trading, finding support as the U.S. dollar weakened in the wake of the Federal Reserve’s latest policy statement.
The central bank left interest rates unchanged as expected and signaled no more interest-rate increases this year.
See Live blog and video of Fed decision and Powell press conference
Gold for April delivery
GCJ9, +0.47%
was at $1,315.20 in electronic trading shortly after the Fed news. The contract had lost $4.80, or 0.4%, to settle at $1,301.70 an ounce on Comex Wednesday, giving up nearly all of the $5 an ounce it gained a day earlier.
The dollar, as measured by the ICE U.S. Dollar Index
DXY, -0.59%
turned lower, losing 0.5%. A weaker dollar can boost investment interest in dollar-denominated prices of gold.
The Fed signaled no further increase in interest rates this year and just one in 2020, according to its new ‘dot plot,’ and the bank said it would end its balance-sheet runoff by September.
After the Fed announcement, “it is safe to say that there are no dots left to look at, the board is clean,” said Naeem Aslam, chief market analyst at ThinkMarkets UK. “The Fed has sent a dovish message which was in line with the market expectations.”
Earlier Wednesday, concerns about U.S.-China trade talks had provided some support for the metal, though modest strength in the dollar also kept pressure on prices.
Meanwhile, a “risk-off sentiment appears to be creeping back into the markets, amid reports that China is pushing back against the United States in trade negotiations,” said Jameel Ahmad, global head of currency strategy and market research at FXTM, in a note. The Dow Jones Industrial Average
DJIA, +0.04%
headed lower Wednesday.
President Donald Trump told reporters Wednesday that he plans to keep tariffs on China until he’s sure Beijing is complying with any trade deal, according to a report from Bloomberg.
A separate Bloomberg report late Tuesday had said Chinese officials were pushing back on some U.S. demands, while a report by The Wall Street Journal said high-level talks were set to resume and that officials were optimistic a final agreement could be struck by next month.
“Markets can expect several more twists and turns ahead in what has already been a long, drawn-out process, and this is still seen as potential fuel for safe-haven assets like gold,” Ahmad said.
In other metals trade, palladium rallied deeper into record territory, with the June contract
PAM9, +0.63%
up $8.50, or 0.6%, to $1,560.40 an ounce.
Traders are concerned about Russia’s potential ban on the export of precious metals to promote its domestic refining of the materials, according to Reuters.
However, Maxwell Gold, Director of Investment Strategy at Aberdeen Standard Investments, said such a move “won’t have an impact on current supply/demand balance for palladium.”
“The proposed export ban would be temporary and aimed at precious metal scrap rather than ore or finished refined metals,” he said in emailed commentary. “Russia does not account for a material amount of scrap supply for the palladium market.”
April platinum
PLJ9, +1.52%
also rose $7, or 0.8%, to $859.60 an ounce. May silver
SIK9, +0.67%
gave up 5.4 cents, or 0.4%, to end at $15.318 an ounce and May copper
HGK9, +0.51%
fell less than half a cent to $2.921 a pound.
Among exchange-traded funds, SPRD Gold Shares
GLD, +0.52%
was down 0.3%.
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Source : MTV
