Gold futures settled slightly higher on Wednesday and edged up further after the Federal Reserve hinted at scaling back its asset purchases in the near future and raising interest rate by the end of 2022.
A weak dollar supported the yellow metal’s uptick. The dollar index, which briefly emerged above the unchanged line from 93.11, retreated again after the Fed announcement. It was last seen at 93.10, down 0.1% from the previous close.
Gold futures for December settled with a gain of $0.60 at $1,778.80 an ounce.
Silver futures for December ended higher by $0.296 at $22.907 an ounce, while Copper futures for December settled at $4.2520 per pound, up $0.1260 from the previous close.
The Fed said that a moderation in the pace of asset purchases might be warranted if the economy continues to progress broadly as expected.
The central bank currently plans to continue its bond purchases at a rate of at least $120 billion per month but is expected to begin scaling back later this year.
The central bank projects three rate hikes in 2023 and three more in 2024.
Fed officials also downwardly revised forecasts for U.S. GDP growth in 2021 to 5.9% from 7%, while forecasts for GDP growth in 2022 were upwardly revised to 3.8% from 3.3%.
Core consumer price inflation is expected to reach 3.7% this year compared to the 3% forecast in June. In the statement, the Fed described inflation as “elevated” but continued to attribute the price growth to “transitory factors.”
Investors now look ahead to a news conference hosted by Fed Chairman Jerome Powell for further guidance on the central bank’s plans.
Earlier in the day, the Bank of Japan said that it would continue with its ultra-easy monetary policy as the country wrestles with coronavirus outbreaks caused by the delta variant.
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