Forex Marketz Daily Forex News – Fully Markets Update
Gold prices rose this morning. During the morning Asian trade session today, the price of gold moved higher. The bullion is trading at three week high price point.
Yesterday, the Federal Open Markets Committee (FOMC), the monetary policy arm of the US Federal Reserve left rates as is, which was expected, but adopted a very dovish monetary policy tone in their statement. They ruled out any rate hikes this year with maybe one in 2020.
The FOMC slashed their economic growth and inflation forecasts as well. This brought there three year rate hike cycle to a close.
As of 5 am GMT, the widely traded spot gold futures contract, was trading higher. This contract added a half percent to trade at $1,318.46 per ounce. It had hit its highest price level since February 28 at $1,319.02 earlier in the trade session.
U.S. gold futures, for front end delivery, rose as well. This contracted added 1.3 percent to trade at $1,318.30 an ounce.
Palladium futures are now trading at a new record high thanks to a shortage in the market.
Gold Traders Digest the FOMC Policy shift and Support the Yellow Metal
This was a major pivot with monetary policy for the Fed. The FOMC took a very dovish monetary policy stance that ruled out any rate hikes in 2019 with one rate hike maybe coming in 2020. They also slashed their economic growth and inflation forecasts.
The Fed feels they need to guard against inflation with a more restrictive approach to monetary policy as the move forward. This dovish tone has weakened the US dollar. That has boosted the price of the bullion as well. When the dollar is trading high, it makes it more expensive for traders who use other currencies to buy, store and insure the yellow metal.
