Gold prices steady as Fed's hint at 'some' hikes in 2019

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USA gold futures settled up 0.9 percent, at 1,267.90 per ounce.

Spot gold was little changed at $1,259.34 US per ounce, after jumping more than 1% in the previous session.

The Wednesday decision marked the Fed's fourth rate hike this year and the ninth since late 2015, as the USA central bank moves forward on the path of monetary policy normalization.

"Maxwell Gold, director of investment strategy at Aberdeen Standard Investments, said that growing uncertainty in financial markets could force the Federal Reserve to slow down tightening of monetary policy next year", reports Kitco News.


In the wake of the Fed announcement, USA stocks declined sharply on Wednesday, with both the Dow Jones Industrial Average and the Standard & Poor's 500 index falling about 1.5 percent.

But now, a day after fresh Fed forecasts showed most policymakers see two rate hikes next year and one in 2020, the betting in rate futures markets is that they will need to backtrack.

The dollar was steady in Asian trade, managing to recover from the previous session's low as markets came to terms with the Fed's outlook.

Gold is highly sensitive to rising interest rates, which lift the opportunity cost of holding non-yielding bullion. For the past three years rate futures traders have expressed scepticism the Fed would deliver as many rate hikes as promised. "There is some good support at $1,230-$1,235", said a trader based in Hong Kong, adding that in the near-term, the dollar index was going to be a "good proxy" for what gold is going to do. Concerns about global growth seeped into the stock markets following the Fed's rate hike outlook, as worries of recession inflated, impairing risk sentiment.


Asian shares retreated on Thursday from their previous session's declines.

The Fed's plans to continue raising interest rates next year were met with more scepticism on Wall Street on Monday, with futures traders betting on a pause and one major bank partially walking back a hawkish prediction.

As investors flocked to the safety of government bonds, United States benchmark Treasury yields fell to more than eight-month lows on Wednesday.

As for other precious metals, silver for March delivery dropped 16.70 cents, or 1.12 percent, to settle at 14.702 dollars per ounce.


Silver rose 1.2 percent to $14.77 per ounce, having earlier hit its highest since November 2 at $14.84 an ounce, while platinum rose 1 percent to $794.

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