Gold surges 3% as Fed slows rate hikes
On Thursday, gold futures dared to climb up, being inspired by the fact that the Fed ruined expectations as for another interest rate increase.
The US central bank dropped a hint at two probable rate hikes this year, though in December up to four hikes were expected. The Fed’s policy makers keep looking for risks for the national economy. Their dovish outlook brought the greenback lower, simultaneously causing a surge in dollar-denominated commodities, including gold.
Gold for April delivery showed a 3.1% soar, trading at $1,267.30 per ounce. As a result, the number one precious metal found itself on track for the month’s biggest rally.
The ICE dollar index dipped 0.9%, trading at 95.05.
Financial analysts stress that one shouldn’t underestimate the Fed’s capability to influence markets. It feels like the doves are gradually winning the argument and it’s clearly seen from the Fed’s dovish announcement.
Of course, when the dust settles, most market participants will have an idea of how this Fed’s move may impact the gold bugs.