Gold moved higher in the Asian trading hours following the Federal Open Market Committee’s (FOMC) statement release.
The spot gold price was last at $1,187.5/1,188.2 per ounce, up $3.20 on the previous close. Trade has ranged from $1,184.2 to $1,188.5 so far.
The June FOMC statement was more positive in its assessment of activity than April’s, noting that the economy is expanding at a moderate pace and that “since the committee last met in April, the pace of job gains has picked up and labour-market gains have improved further.”
“It is clear that the US Federal Reserve remains on track to raise rates later this year,” ANZ said. However, 2015 growth forecasts were revised down, and unemployment rate forecasts were revised up.
Fed chair Janet Yellen said that people are putting too much emphasis on when the first increase happens – she said it really doesn’t matter “whether it is September or December or March”, while adding that the process of raising rates will be a gradual one.
The members of the Fed’s policy board are locked in a debate on when will be the right time to raise rates, which have been near zero since December 2008.
“The next focus for the bullion market may shift to the upcoming release of CPI data,” James Steel, HSBC analyst, noted.
Elsewhere, the standoff between Greece and its creditors continues ahead of today’s Eurogroup meeting. Greek prime minister Alexis Tsipras commented that he was ready to “assume the responsibility” for rejecting an “unfair” deal with creditors. “It appears both sides are preparing for a failure of talks,” ANZ commented.
After talks degenerated over the weekend, the Mediterranean country has until the end of the month to repay 1.6 billion euros to the fund or face a possible exit from the bloc.
“Gold is likely to prove more and more volatile as we move towards the June 30 payment deadline, if a deal is not forged,” MKS said.
“A Greek exit would be a bullish scenario for the gold investors likely to quickly seek out safe havens like gold and blue chip government bonds,” it added.
Today’s data includes US current account, inflation and Philly Fed manufacturing index.
Earlier, China’s property prices fell at a slower pace of 5.7 percent year-on-year in May compared with a fall of 6.1 percent in the previous month, according to the country’s National Bureau of Statistics.
China’s foreign direct investment came in at 10.1 percent.
As for the other precious metals, silver was little changed at $16.14/16.19. Platinum at $1,080/1,085 was up $2, while palladium at $722/727 increased $2.
On the Shanghai Futures Exchange (SHFE) gold was unchanged at 240 yuan per gram.
(Additional reporting by Dalton Barker)
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