Tags: Fed | gold | policy | Yellen

Gold Falls 1.8 Percent After Fed's Policy Statement

Wednesday, 19 March 2014 03:21 PM

Gold fell 1.8 percent on Wednesday after the Federal Reserve dropped the U.S. unemployment rate as its definitive yardstick for gauging economic strength, and made clear it would rely on a wide range of measures in deciding when to raise interest rates.

The U.S. central bank also said that dropping a promise to hold rates steady "well past the time" the U.S. unemployment rate falls below 6.5 percent did not indicate any change in the Fed's policy intentions.

It also proceeded with its well-telegraphed reductions to its massive bond-buying stimulus, announcing it would cut its monthly purchases of U.S. Treasurys and mortgage-backed securities to $55 billion from $65 billion.

"Gold's appeal as an inflation hedge is not as strong after the Fed's moves. It was already down on the reduction in geopolitical risk, so the combination of the two is pretty powerful," said James Steel, chief precious metals analyst at HSBC.

Earlier in the session, gold came under pressure after Russian President Vladimir Putin signed a treaty on Tuesday making Crimea part of Russia again but said he did not plan to seize any other regions of Ukraine.

Spot gold fell 1.8 percent to $1,331.80 an ounce by 2:27 p.m. EDT, on track for its biggest one-day fall since Jan. 30.

U.S. COMEX gold futures for April delivery settled down $17.70 at $1,341.30 an ounce, with trading volume about 10 percent above its 30-day average, preliminary Reuters data showed.

© 2021 Thomson/Reuters. All rights reserved.


Markets
Gold fell 1.8 percent on Wednesday after the Federal Reserve dropped the U.S. unemployment rate as its definitive yardstick for gauging economic strength, and made clear it would rely on a wide range of measures in deciding when to raise interest rates.
Fed,gold,policy,Yellen
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2014-21-19
Wednesday, 19 March 2014 03:21 PM
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