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Gold: USD Recovery Caps Gains

The yellow metal posted a third consecutive positive week. Gold prices took advantage of the initial USD weakness in response to the latest FOMC meeting. The Fed kept rates on hold as expected. The bank noted that growth was lower than expected over the first part of the year, despite solid labor market conditions and subdued inflation. Looking ahead, the Fed reaffirmed its commitment to keeping rates on hold saying it would be maintaining a “wait and see” approach to incoming data as well as highlighting the need for keeping an eye on global developments.

USD was quickly shunted lower as the market reacted to the decision and statement, allowing gold to trade further higher. However, a sharp USD recovery over Friday and Thursday has capped gold upside for now. The BOJ and ECB monetary policy is still at cycle lows. And the Bank of England confirmed that it will also be keeping rates on hold amidst ongoing Brexit uncertainty. As such, it seems that rate di...

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