Gold gains after US Fed maintains accommodative stance
- Gold tends to benefit from widespread stimulus measures from central banks because it is viewed as a hedge against inflation.
Gold prices rose on Thursday bolstered by the US Federal Reserve's pledge to maintain easy monetary policy to aid economic recovery, while a weaker dollar provided further support.
FUNDAMENTALS
Spot gold was up 0.2% at $1,784.94 per ounce by 0101 GMT, having dipped to $1,762 in the previous session, its lowest since April 16. US gold futures rose 0.6% to $1,784.50 per ounce.
The dollar index edged 0.1% lower against its rivals, boosting gold's appeal for other currency holders.
The Federal Reserve held interest rates and its bond-buying program steady on Wednesday after its two-day policy meet despite taking a rosier view of the US economic recovery.
Fed Chair Jerome Powell also said the coming price increases would almost surely be of a passing nature, and not present the sort of persistent problem that would force the central bank to begin raising interest rates sooner than expected.
US President Joe Biden plans to unveil a sweeping $1.8 trillion package for families and education in his first speech to Congress.
Gold tends to benefit from widespread stimulus measures from central banks because it is viewed as a hedge against inflation.
Meanwhile, the US trade deficit in goods jumped to a record high in March, suggesting trade was a drag on economic growth in the first quarter, but that was likely offset by robust domestic demand amid massive government aid.
Autocatalyst metal palladium edged up 0.3% to $2,936.10 per ounce, having scaled an all-time peak of $2,962.50 on Tuesday.
Silver gained 0.6% to $26.34 per ounce. Platinum was up 0.3% at $1,222.93.