Gold weakens on dollar rally after Federal Reserve decision

Spot gold slipped on Thursday under the weight of a rallying dollar, after falling more than 1 per cent in the previous session when the US Federal Reserve announced its plan to load up long-term securities and offered a grim economic outlook.

Warning of “significant” downside economic risks, the US central bank said it would launch a $400 billion programme to shift its $2.85 trillion balance sheet more heavily towards longer-term debt.

The decision disappointed investors who had hoped for stronger stimulus measures, prompting a slide in stocks and commodity prices.

The worries about the euro zone’s debt crisis continue to support the safe haven appeal of gold, but momentum is lacking for bullion to march towards its record high above $1,900.

“For the short term, gold is likely to remain in the range of $1,750 and $1,850,” said Ong Yi Ling, an analyst at Phillip Futures.

“If we do see $1,700, that could potentially cause greater correction to $1,500.”

Spot gold lost 0.4 per cent to $1,774.55 an ounce by 0304 GMT, extending a 1.2-per cent decline in the previous session.

1 2

Tags: Gold analysis, Gold future prices, Gold futures, Gold investment, Gold news, Gold price, Gold price forecast, gold prices, Silver price, silver prices