Gold futures on the COMEX division of the New York Mercantile Exchange rallied on Wednesday from five-month lows as the U.S. Federal Reverse announced widely expected interest rate hike.
The most active gold contract for February delivery rose 6.9 dollars, or 0.56 percent, to settle at 1248.60 dollars per ounce, shortly before the interest rate hike announcement.
The gold futures continued the upturn in electronic trading after the Fed decision.
While raising the target range for the federal funds rate to 1.25 to 1.5 percent, the Federal Reserve also hinted at a wait-and-see approach to further rate hikes.
"In determining the timing and size of future adjustments to the target range for the federal funds rate, the (Federal Open Market) Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and two percent inflation," said the central bank in a statement.
Heavy short covering in the futures markets and bargain buying in the cash markets were featured in gold trading on Wednesday, following recent selling pressure that dragged down gold prices to five-month lows on Tuesday.
Tame inflation below the two-percent target pressured the U.S. dollar index, a measure of the dollar against a basket of other major currencies, It fell 0.26 percent to 93.85 as of 1823 GMT.
The dollar and gold typically move in opposite directions, which means if the dollar index goes down, the precious metal will rise.
As for other precious metals, silver for March delivery went up 20.1 cents, or 1.28 percent, to settle at 15.869 dollars per ounce. Platinum for January edged down 30 cents, or 0.03 percent, to close at 875.40 dollars per ounce.
The most active gold contract for February delivery rose 6.9 dollars, or 0.56 percent, to settle at 1248.60 dollars per ounce, shortly before the interest rate hike announcement.
The gold futures continued the upturn in electronic trading after the Fed decision.
While raising the target range for the federal funds rate to 1.25 to 1.5 percent, the Federal Reserve also hinted at a wait-and-see approach to further rate hikes.
"In determining the timing and size of future adjustments to the target range for the federal funds rate, the (Federal Open Market) Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and two percent inflation," said the central bank in a statement.
Heavy short covering in the futures markets and bargain buying in the cash markets were featured in gold trading on Wednesday, following recent selling pressure that dragged down gold prices to five-month lows on Tuesday.
Tame inflation below the two-percent target pressured the U.S. dollar index, a measure of the dollar against a basket of other major currencies, It fell 0.26 percent to 93.85 as of 1823 GMT.
The dollar and gold typically move in opposite directions, which means if the dollar index goes down, the precious metal will rise.
As for other precious metals, silver for March delivery went up 20.1 cents, or 1.28 percent, to settle at 15.869 dollars per ounce. Platinum for January edged down 30 cents, or 0.03 percent, to close at 875.40 dollars per ounce.
Latest comments