Gold futures settled slightly lower Wednesday, after the Federal Reserve meeting revealed no major shifts in its accommodative monetary policy, despite a slightly more downbeat assessment of the economic recovery. The Fed indicated "economic growth to remain moderate over coming quarters and then to pick up gradually."
Gold for June delivery, the most actively traded contract, dropped $1.5 or 0.1 percent to close at $1,642.30 an ounce Wednesday on the Comex division of the New York Mercantile Exchange.
Gold traded at an intraday high of $1,645.70 an ounce and a low of $1,625.00 an ounce.
The Federal Open Market Committee once again refrained from a third round of quantitative easing. Members also elected to not extend Operation Twist, the Fed's sale of medium-term bonds to buy longer-term bonds, past its expiration in June.
The Fed decision to keep its benchmark rate at effectively zero was in line with economist expectations and did not waver from its conditional pledge to keep rates at historic lows until late 2014.
Yesterday, gold ended higher as concerns over the eurozone sovereign debt crisis eased, while the dollar continued to weaken against the euro and other major currencies following some weak economic data on home prices and consumer confidence from the U.S.
The euro pared gains to trade lower against the dollar at $1.3181 on Wednesday, as compared to $1.3187 late Tuesday. The euro scaled a high of $1.3235 intraday.
The dollar index, which tracks the U.S. unit against six major currencies, pared losses to trade higher at 79.291 on Wednesday, from 79.256 in North American trade late Tuesday. The dollar scaled a high of 79.26 intraday, with a low of 79.04.
In economic news, the U.S. Commerce Department's advance estimates of new durable goods orders for the month came in at $202.6 billion, a 4.2 percent decrease from February levels, marking the largest monthly decline since January 2009. Most economists predicted durable goods orders to fall from February levels but the market generally expected a much less severe drop of around 1.5 percent.
From the eurozone, the U.K. economy unexpectedly contracted for the second straight time in the first quarter, the Office for National Statistics showed today. Gross domestic product dropped 0.2 percent sequentially, while economists forecast a 0.1 percent expansion. This follows a 0.3 percent drop in the fourth quarter 2011.
by RTT Staff Writer
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