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PRECIOUS-Gold slips as Fed offers no pointers on further stimulus

Published 17/09/2020, 08:22 pm
© Reuters.
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(Updates prices)

* Fed to hold rates near zero until at least 2023

* Platinum falls more than 2%

* Interactive graphic tracking global spread of coronavirus: https://graphics.reuters.com/world-coronavirus-tracker-and-maps/

By Nakul Iyer

Sept 17 (Reuters) - Gold slipped on Thursday after the U.S. Federal Reserve disappointed expectations for further stimulus to spur inflation and support the economy, battered by the coronavirus crisis.

Spot gold XAU= dropped 0.8% to $1,944.44 per ounce by 1129 GMT. U.S. gold futures GCcv1 slipped 0.9% to $1,952.20.

"The gold market was somewhat disappointed by the lack of outlook or guidance (about) what the Fed would do in order to spur inflation," Carsten Menke, analyst at Julius Baer, said.

He said as gold has moved from below $1,200 to more than $1,900, quite a few risks have been priced into gold and to see even more upside, there should be an even greater pool of risks which could affect financial markets.

The Fed also stated that it expected a faster economic recovery than previously forecast, with unemployment falling more quickly than it had expected in June. keeping a floor under non-yielding gold, the Fed pledged to keep rates pinned near zero levels until inflation was on track to "moderately exceed" its 2% inflation target "for some time". interest rates globally and demand for a hedge against perceived inflation have helped gold to gain about 28% so far this year.

Elsewhere, the Bank of Japan kept monetary policy steady on Thursday and suggested there would be no immediate expansion of stimulus. analyst Ross Norman said gold had already done a lot of the "heavy lifting" year-to-date, and would not go much higher or lower. "The best indicator that momentum has come off gold is in the Exchange Traded Funds," he said.

Investors have slowed their rapid accumulation of gold-backed ETFs seen earlier this year. GOL/ETF

Elsewhere, silver XAG= dropped 1.5% to $26.82 per ounce, platinum XPT= dipped 2.4%, to $945.97 per ounce, and palladium XPD= fell 1.1% to $2,372.99.

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