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Gold prices gain into Asia, Iraq, easy monetary policies, support

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Investing.com -

Investing.com - Gold prices continued slight gains into Thursday Asian trade with demand prospects in focus on Middle East tension and expectations of continued easy global monetary policies.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at $1,278.40 a troy ounce, up 0.45%, after hitting an overnight session low of $1,266.60 and off a high of $1,275.70.

The Federal Reserve on Wednesday said it was leaving its benchmark interest rate unchanged at 0.00-0.25% but said it would cut its monthly bond-buying program to $35 billion from $45 billion due to an improving economy.

Fed bond purchases support gold by weakening the dollar, as the two assets tend to trade inversely with one another, and news of their dismantling often weakens the yellow metal.

Still, gold found room to rise on Wednesday as the Fed pointed out once bond purchases end, rates won't rise immediately afterwards, the Fed's rate setting body, the Federal Open Market Committee, said in a statement earlier.

"The Committee continues to anticipate, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored," the Fed said.

"The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run."

Silver for July delivery rose 0.71% at $19.918 a troy ounce. Copper futures for July delivery were up 0.03% at $3.067 a pound.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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