Gold eased on Thursday as investors booked profits after prices rose to a more than a one-week high on bleak economic projections from the Federal Reserve. Spot gold was down 0.2 per cent at $1,732.39 per ounce by 8:59 am, after hitting its highest level since June 2 at $1,739.68 per ounce earlier in the session. US gold futures climbed 1.2 per cent to $1,741.80 per ounce.
On Wednesday, spot gold prices rose 1.3 per cent, their biggest daily percentage rise in more than a month, after the US central bank said it would be a long road to recovery from the coronavirus-induced slump.
“We are seeing some profit-taking… But, gold has gotten through the $1,725 level, which suggests that we are in a pretty bullish format right now,” said Stephen Innes, chief market strategist at financial services firm AxiCorp.
“The underlying commitment with the Fed signalling their targets and rates are going to remain on hold through 2022 is quite positive for the gold market.”
The US central bank repeated its promise of continued extraordinary support, and also flagged the need to keep the key interest rate near zero through at least 2022.
Federal Reserve policymakers signalled the impact of the COVID-19 pandemic would echo through the economy for years to come rather than be quickly reversed as commerce reopens.
Large stimulus measures and low interest rates tend to support gold, which is often considered a hedge against inflation and currency debasement.
Among other metals, silver declined 2 per cent to $17.88 per ounce, after rising 3.8 per cent in the last session.
Palladium fell 1 per cent to $1,928.44 per ounce and platinum dipped 0.2 per cent to $831.04.