The gold price fell following the keynote FOMC statement on Wednesday, as the Federal Reserve chose to remove the calendar reference for the eventual rate increase.
“The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its two percent objective over the medium term,” the Federal Open Market Committee report said.
The dollar index took a beating overnight, falling to its softest since end of February, as the release of US quarterly GDP numbers disappointed markets as well.
US advance GDP rose 0.2 percent, missing the forecast of 1.0 percent and down from the previous quarter’s downwardly revised 2.2 percent, while the advance GDP price index declined 0.1 percent – analysts had projected 0.5-percent increase.
The spot gold price was last at $1,204.40, slipping by about $1.20 from Wednesday’s close. Silver was $0.06 lower to $16.52 per ounce.
“The FOMC statement may have been interpreted as slightly hawkish by the gold market as prices fell by $7 to slightly over $1,200 per ounce…Gold may remain weak in the near-term as the markets continue to digest the FOMC statement,” said a report from HSBC Securities.
For tomorrow, a number of markets will be closed for 1 May labour holiday including Singapore, Hong Kong and China.
“Most Asian markets are closed tomorrow due to May Day, so expecting a
quiet day leading into the long weekend,” said a report from MKS Capital.
For the day ahead, the US weekly jobless claims data will continue to be monitored for any sign of lost momentum, as well as a string of data releases out of Europe – the first estimate of Euro area inflation for April will be out, March consumer spending reports will be released in Germany and France; whilst Spain will print Q1 GDP and the April CPI.
The other precious metals were slightly lower as well, with platinum slipping $3.50 to $1,150 per ounce and palladium $3 lower at $780.
The post Gold price lower despite weaker USD, quiet trade expected ahead of holidays appeared first on The Bullion Desk.
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