Gold has posted strong losses in the Thursday session, after recording strong gains on Wednesday. In North American trade, the spot price for an ounce of gold is $1327.54, down 0.35% on the day. On the release front, unemployment claims rose to 229 thousand, higher than the forecast of 225 thousand. On Friday, the US releases durable goods and housing reports.
Gold propelled to 2-week highs on Wednesday, following gains of over 1 percent. The base metal has reversed directions on Thursday, as the markets digest the Federal Reserve rate statement, which was somewhat hawkish. The Fed raised rates by a quarter-point on Wednesday, marking the first rate hike in 2018. he markets were looking for any clues with regard to the pace of rate hikes in 2018 – currently the Fed is projecting three hikes, but a robust US economy could push the Fed to press the rate trigger four times. The rate statement did not directly address the issue, but there was a refreshing lack of Fedspeak from policymakers, who said that “the economic outlook has strengthened in recent months”. This phrase has not been used in previous rate statements, and underscores a more hawkish stance from the Fed. The markets are expecting the Fed not to skip a beat, with the CME Group pricing another rate hike in May at 96%. This could translate into gains for the US dollar, at the expense of gold and other currencies.
