Gold rose on Wednesday as the dollar eased after the Federal Reserve held rates steady, a decision that had been largely expected. Fed Chair Kevin Warsh pointed to some tightening of financial conditions since September, and Q3 GDP and inflation data could arrive as soon as Thursday.
Gold prices rose on Wednesday as the dollar eased after Fed Chair Kevin Warsh indicated that financial conditions had tightened somewhat since the central bank's September rate decision. At 15:58 ET, spot gold added 0.2% to $4,069.86/oz, while gold futures climbed 0.8% to $4,084.15/oz.
Fed holds the federal funds rate at 3.75%-4.00%
The Federal Open Market Committee maintained the federal funds rate at 3.75%-4.00% in a 10-2 vote, with Governor Lisa Cook and Cleveland Fed President Beth Hammack preferring a quarter-point hike instead. The outcome had been largely expected after the FOMC's first rate hike in over three years in September.
The Fed stood pat despite hotter-than-expected inflation readings recently. Warsh said at the press conference that employment conditions were quite positive and that the committee's discussion focused mainly on inflation.
Data ahead may shape the policy path
Warsh noted that crucial economic data was due in the coming days. Q3 U.S. gross domestic product and the September reading on the Fed's preferred inflation gauge could arrive as soon as Thursday.
According to Warsh: "The period right in front of us is information rich." He also announced a change to the FOMC's 2027 and 2028 schedule: the committee will keep eight meetings, but one next year will focus on monetary policy strategy rather than a rate decision.
Oil caps gold's gains
A rise in oil prices capped gold's advance. Brent crude futures were up 1.1% to $115.12 a barrel as of 15:50 ET, amid fighting between Iran-backed Houthis and the Saudi Arabia-backed government in Yemen.
The Houthis said on Tuesday that the group had attacked the Ras Tanura refinery, the biggest oil refinery in Saudi Arabia.
Source: Investing.com
Trading involves risk.
Risk Disclaimer
