Price of bullion retreats as Fed does not rule out 2015 rate rise

NEW YORK/LONDON — Gold fell on Wednesday, extending the session’s losses after the US Federal Reserve signaled it was taking a meeting-by-meeting approach on when to raise interest rates for the first time since 2006.

Following a two-day meeting, the Federal Reserve pointed to weakness in the US labor market and economy — a sign it is struggling with plans to raise interest rates this year.

Spot gold fell to a session low of $1,201.13 after the Fed statement, and was down 0.6% at $1,204.70 an ounce at 3:03 p.m. EDT (1903 GMT). It gained nearly 3% in the last two sessions, rising to a three-week high of $1,215 on Tuesday. US gold futures for June delivery settled down $3.90 at $1,210.00 an ounce.

“The market is reading that the Fed hasn’t materially moved its liftoff time frame despite recent weakness in economic growth and employment,” said Tai Wong, director of metals trading at BMO Capital Markets in New York.

“The market is reading that the Fed isn’t overemphasizing the winter slowdown and the poor March payrolls.”

While many traders had already lowered expectations for an interest rate rise in June, the Fed’s statement did not rule out a September increase.

The US dollar, which had fallen sharply to a two-month low, pared losses against a basket of major currencies after the Fed statement was released.

Among other precious metals, silver was down 0.3% at $ 16.54 an ounce, platinum slipped by 0.2% at $1,150.49 an ounce, while palladium dropped by 0.5% to $ 779.75 an ounce. —