Thursday, 26 March 2015 00:36
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Reuters: Gold edged lower on Wednesday after a five-day rally, but stayed close to a 2-1/2-week high on growing expectations the US Federal Reserve would not raise interest rates until September.
Spot gold had eased 0.2% to $ 1,190.90 an ounce by 0737 GMT, but was not too far from a peak of $ 1,195.30 reached the session before.
The metal’s five-day rally as of Tuesday came after the Fed sounded a cautious note last week on the US economy and the pace of any rate-hike.
“For the rest of this month, markets (will be) adjusting to the reality that the Fed is more dovish than previously expected,” said Phillip Futures analyst Howie Lee, adding that this would continue pushing gold prices higher.
Prices could climb to $ 1,200 in the immediate future and $ 1,240 in the next quarter, Lee said.
Demand for gold, a non-interest paying asset, had been hurt by expectations of a near-term rate hike.
But since the Fed meet last week, consensus expectations for a US interest rate increase have shifted, with most of Wall Street’s top banks now expecting the Central Bank to hold off until at least September, compared with previous expectations of June, a Reuters poll showed.
