Gold prices edged higher on Thursday after the U.S. Federal Reserve cut interest rates as expected, even as the central bank dropped a previous reference in its statement that signalled future rate cuts.
FUNDAMENTALS
* Spot gold rose 0.3% to $1,499.06 per ounce as of 0137 GMT. U.S. gold futures inched 0.3% higher to $1,501.40 per ounce.
* The U.S. central bank on Wednesday cut interest rates for the third time this year to help sustain U.S. growth despite a slowdown in other parts of the world, but signalled there would be no further reductions unless the economy takes a turn for the worse.
* Gold prices gained modestly after the statement, but turned negative soon after Fed Chair Jerome Powell said in a news conference that the U.S. economy was doing well, and likely to continue to do so under the current stance of monetary policy.
Also read| Global markets: Asian stocks edge higher after Fed rate cut, focus shifts to BOJ
* Asian shares cheered the rate cut and U.S. stock futures edged higher with MSCI’s broadest index of Asia-Pacific shares outside Japan gaining 0.2%.
* Investors now shift focus to Japan where its central bank may trim its consumer price forecasts, but leave policy unchanged due to hopes that progress in scaling back a U.S.-China trade dispute will give it room to save its dwindling policy tools.
* A more than 15-month trade spat between China and the United States has roiled financial markets and stirred global recessionary fears.
* The dollar index against a basket of six major currencies dipped 0.2% to 97.427, extending declines from Wednesday. A lower U.S. currency makes dollar denominated metals cheaper for holders of other currencies, which could help boost their demand.
* Elsewhere, gold consumption in China, the world’s top producer and consumer of the precious metal, fell 9.58% year-on-year to 768.31 tonnes in the first nine months of 2019, China Gold Association said on Wednesday.
