Gold edges up globally on breather from US Fed

Written by fe Bureau | New Delhi | Updated: Apr 11 2014, 09:54am hrs
Gold hit a more than two-week high in intraday trade on Thursday, responding to the weakness of the dollar after minutes from the US Federal Reserve's policy meeting tempered any expectation of an interest rate hike any time soon.

Spot gold scaled its peak since March 24 at $1,323.92 an ounce by 7.56 ET, up 0.92%. US gold futures for June gained slightly more than 1% to $1,322.70 an ounce.

The minutes of last month's Fed meeting, released on Wednesday, showed central bankers were willing to dump the thresholds they had been using in recent months to judge the need for hardening monetary policy.

The minutes also refrained from a suggestion on any appropriate time to raise the interest rate.

Earlier, the Fed had cut the monthly pace of bond purchases by $10 billion, to $55 billion, and stated it could continue rolling back the stimulus in further measured steps".

The minutes dragged down the dollar, which hit three-week lows against a basket of currencies. Since the precious metal is priced in the greenback, any weakening of the dollar enhances gold's appeal for users of other currencies.

Prices of gold, considered a safe-haven asset and a hedge against inflation, lost 28% last year as the Fed decided to start scaling back its bond-buying stimulus measures after weeks of keeping investors on edge about the tapering.

Scaling down the Fed's quantitative easing programme hurt gold, as the precious metal's rally in recent years was aided by a low interest rate environment, which prompted investors to shift to haven assets like gold to beat inflationary pressure.