Precious-Gold rebounded slightly on Thursday, hovering near a three-week low. This came after the Fed signaled that it may raise interest rates next year while continuing with stimulus reduction.
Fed officials estimate a hike in borrowing costs to at least 1 percent at the end of 2015, higher than previously expected.
The Fed decided after its two-day meeting, concluded on Wednesday, to slash bond purchases by another $10 billion to $55 billion, illustrating that it will cut stimulus “in further measured steps at future meetings.”
Now, the Fed could end its bond-buying programme this fall, giving a boost to the dollar, which climbed to three-week high yesterday.
Regarding forward guidance, Fed Chairman Janet Yellen announced she will link raising interest rates to a broader range of economic data rather that a drop in jobless rate to a 6.5 percent threshold.
The yellow metal lost around 3.8 percent over the previous three sessions, falling from a six-month high, as expectations the Fed would continue with its stimulus taper plan dented demand on the metal as an inflation hedge.
The political worries in Ukraine continued as the U.S. the EU struggle to impose sanctions on Russia, yet failed to give further support to gold as investors’ attention turned the Fed-meeting outcome.
Meanwhile, the yellow metal is trading around $1332.49 an ounce after hitting a high of $1334.48 and a low of $1325.65.
The U.S. dollar retreated against a basket of major currencies, following yesterday’s sharp rise, to hover around 80.06 after opening at 80.17, according to the dollar index.
Crude oil for April’s delivery rose to $100.36 a barrel from the session’s opening of $99.46.
