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The price of gold closed floor trading flat on Wednesday and inched lower in electronic deals after the Fed announced its latest interest rate decision.
December gold closed at $1,014.00, down 20 cents on the session. Prices hit as low as $1,007.20 in mid-day trading.
Following a two-day policy meeting, the Federal Reserve again left interest rates at zero to 0.25%, as expected, and also repeated its promise to keep rates low for some time. At the same time, the Fed also gave a relatively upbeat assessment of the economy, saying that while weakness is likely to persist, conditions seem right for improvement.
The dollar was choppy with the euro, briefly touching a new yearly low of 1.4843 after the rate announcement before recovering the losses. Gold usually moves opposite the dollar because of its hedge value.
Gold reached as high as $1,020.40, challenging last week's 18-month intraday high of $1,025.80. Gold closed at a record $1,020.20 last week, although when adjusted for inflation the metal moved near $2,000 in 1980.
In other economic news, the Mortgage Bankers Association's market composite index rose 12.8% on a seasonally adjusted basis. On an unadjusted basis the index increased 24.6% from the previous week and 14% from the same week last year.
Initial jobless claims data is due at 8:30 a.m. ET. First-time applicants for unemployment benefits are expected to rise to 550,000, compared to 545,000 a week earlier.
At the same time, existing home sales are expected to 5.35 million, compared to 5.24 million in July.
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