Gold rallies on news that interest rates will not change
Gold prices rallied on Thursday as some investors embraced the more dovish stance in the Federal Reserve’s statement on interest rates.
The Wall Street Journal reported that the Fed policy makers voted 9-1 to keep the federal-funds rate range unchanged at between 0 and 0.25 percent. Fed officials said that while the U.S. economic picture has continued to improve, wild swings in global markets and weakness in the economies of main trading partners could “restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term.”
Gold futures, which settled lower ahead of the announcement, turned higher on the news to set an intraday high of $1,132.90 an ounce on the Comex division of the New York Mercantile Exchange. The most-active December gold contract settled down 0.2% at $1,117.00 an ounce at 1.30 p.m. EDT, roughly half an hour before the Fed comments were released.
In recent trade, gold was up 1.1% at $1,131.80 an ounce as investors sifting through the U.S. central bank’s communiqué were encouraged by the accommodative language.
