Gold futures climbed Wednesday to settle at their highest level in about a week, then turned lower in electronic trading after the Federal Reserve left interest rates unchanged but kept the door open for a rate hike at its next meeting.
Shortly after the price settlement for gold, the Fed’s policy-setting committee said it decided to keep interest rates close to zero, but also indicated in its statement that it would focus on its “next meeting” in mid-December on whether to raise rates.
Before the Fed news, gold for December delivery gained $10.30, or 0.9%, to settle at $1,176.10 an ounce on Comex. That was its highest finish since Oct. 20.
Shortly after the Fed news, however, prices fell to $1,162 an ounce in electronic trading. The stock market’s gains evaporated.
Gold has benefited from the Fed’s ultraloose monetary policy because commodities like gold don’t offer interest. Lower rates also keep moves in the U.S. dollar in check. A stronger dollar can be a drag on dollar-denominated commodities, making them more expensive for buyers using foreign currencies.
Other metals on Comex settled higher Wednesday before the Fed news, with December silver rallying 43 cents, or 2.7%, to $16.293 an ounce, January platinum tacking on $23.60, or 2.4%, to $1,012.80 and December palladium settling at $686.10 an ounce, or 1.1%. December copper ended barely higher at $2.363 a pound.