The gold market will finish the week higher because of a falling dollar after the announcement of the Fed meeting outcome.
Gold was traded at $ 1254.10 per ounce compared to US $ 1257.15 at the close of Thursday trading, and the US futures fell $ 9.90 to $ 1255.10 per ounce. Since the beginning of the week the spot price rose more than 1 % after falling 0.9 % the previous week.
The Fed on Wednesday kept its benchmark interest rate in the range of 0.25-0.50 % per annum, and the new macroeconomic forecast prepared by the Central Bank suggests raising two key rate hikes before the end of this year, by half a percentage point.
The dollar against the yen got close to a 17-month low, while the dollar index against a basket of six major currencies this week will lost about 1.5 %. The dollar found some support after on Thursday the US Department of Labor said the number of initial applications for unemployment benefits rose last week, less than expected. In addition, the Federal Reserve Bank of Philadelphia reported that manufacturing activity index rose to 12.4 this month from February's -2.8.
The gold market responds to news about interest rates the Fed, because with higher rates, there is growing the profit loss from investment in gold, because it does not produce interest income.
"This is reminiscent of the market reaction to the statement by the Committee on the Federal Open Market. Gold found support at $ 1260, it does not want to fall below this level, which is mainly due to the weakening of the US dollar.", - said an analyst at Phillip Futures in Singapore, Daniel Eng.
Stocks of the world's largest gold ETF-secured fund, SPDR Gold Trust, rose on Thursday by 1.5 % to 807.09 tons.
Silver was traded at $ 15.99 per ounce compared to $ 15.88 at the close of Thursday trade, platinum, was worth $ 972.50, compared with $ 983, and palladium was at $ 590 versus $ 590.