• Gold futures on the COMEX division of the New York Mercantile Exchange rose sharply on Thursday despite the interest rate hike announced by the Federal Reserve the previous day.
• The most active gold contract for April delivery rose 26.4 U.S. dollars, or 2.16 percent, to settle at 1,227.10 dollars per ounce.
• Gold was given extensive support as the U.S. Federal Open Market Committee (FOMC) increased rates but signaled a slower pace of further rate hikes. FOMC hinted that they will act cautiously when making interest rate decisions.
• Many investors believe the Fed may raise rates from 1.00 to 1.25 during the June FOMC meeting. According to the CMEGroup's Fedwatch tool, the current implied probability of a hike from 1.00 to 1.25 is at 4 percent at the May meeting and 51 percent for the June meeting, along with a 2 percent chance of an increase to a 1.5 rate.
• Gold prices held firm on Friday not far from over one-week highs hit the session before, remaining on course for their first weekly rise in three. Gold XAU= inched 0.1 percent lower to $1,225.14 an ounce, as investors took profits after strong gains this week on the Fed's more moderate monetary policy stance. The metal hit $1,233.13, the highest since March 6 in the previous session.
• Holdings of SPDR Gold Trust <GLD>, the world's largest gold-backed exchange-traded fund, fell 0.28 percent to 837.06 tonnes on Thursday from 839.43 tonnes on Wednesday.
• “It is likely that the US dollar rally has come to an end and that more downward pressure is building in the near-term," ABN AMRO adds.
ANB AMRO also thinks that weakness in the gold price is over for now and a move back towards USD 1,250 is on the cards in the coming weeks.
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Looking at gold, it failed today in the 50-61.8% retracement range but it won't take much to get it back to $1250.
• Silver for May delivery rose 40.7 cents, or 2.41 percent, to close at 17.33 dollars per ounce.
Reference: Xinhua, Forexlive, Reuters
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