By Chris Oliver, MarketWatch
HONG KONG (MarketWatch) – Gold futures traded lower after the Bank of Japan stood pat on interest rates, confounding hopes of a more aggressive policy approach to weaken the yen.
Comex gold for August delivery GCQ2 -0.61% was down $12.10, or 0.8%, at $1,562.90 an ounce. In regular U.S. trade on Wednesday, gold ended lower on the day, but continued to drift downward after hours following the release of the Federal Reserve’s policy-meeting minutes from June that were viewed as showing little enthusiasm for another round of quantitative easing.
The BOJ on Thursday stood pat on interest rates and left the overall size of its asset purchase program unchanged at 70 trillion yen ($882.4 billion), although it shuffled the components of the target assets without affecting the overall size of the program.
Barclays analysts said the BOJ policy rate decision amounted to a maintaining of the status quo.
“We view this not as monetary easing, but as a technical change to achieve the existing targets for the asset purchasing program,” Barclays said in a note following the policy rate announcement, in reference to the changes to the component holdings within the asset purchase program.
Also weighing on the mood in Asia, a surprise quarter-point interest rate cut by the Bank of Korea on Thursday rekindled fears of deepening slowdown in region.
The move was also seen as a pre-emptive easing ahead of the official Chinese release of second-quarter gross domestic product growth data Friday.
In other precious metals trading, silver for September SIQ2 -1.25% delivery was down 1.3%, or 34 U.S. cents, at $26.66 per ounce.
Chris Oliver is MarketWatch's Asia bureau chief, based in Hong Kong.
