Gold up on faltering dollar after Fed comments

Gold prices edged higher on Thursday, adding to gains in the previous session on the back of a weaker dollar after the U.S. Federal Reserve disappointed investors expecting more hawkish comments on interest rate rises.

Spot gold rose 0.1 percent to $1,333.41 per ounce at 0030 GMT. Prices rose 1.6 percent in the previous session, the biggest one day percentage gain since May 17, 2017.

U.S. gold futures for April delivery rose 0.9 percent to $1,333.70 per ounce.

Against a basket of currencies, the dollar index was down 0.3 percent at 89.524 after falling as much as 0.7 percent overnight.

The Fed raised interest rates on Wednesday and forecast at least two more hikes for 2018, highlighting its growing confidence that tax cuts and government spending will boost the economy and inflation and spur more aggressive future tightening.

The Trump administration’s punchbowl of tax cuts and government spending may leave the U.S. economy with a stinging hangover in two years, according to fresh Fed forecasts that show monetary policy moving into “restrictive” territory for the first time in more than a decade.

Britain’s central bank is likely to keep on course on Thursday for an interest rate rise in May which would take borrowing costs above their emergency levels for the first time since the financial crisis more than a decade ago.

President Donald Trump will announce tariffs on Chinese imports on Thursday, a White House official said, in a move aimed at curbing theft of U.S. technology that is likely to trigger retaliation from Beijing and stoke fears of a global trade war.

China will actively take steps to safeguard its interests as well as those of its industries, Vice Commerce Minister Wang Shouwen said, in light of what he described as acts of trade protectionism by the United States.

EU leaders will consider on Thursday how best to enter trade dialogue with Trump, whose planned tariffs on steel and aluminium have threatened to trigger a trade war.

U.S. home sales rebounded strongly in February, boosted by hefty gains in the South and West regions, but a chronic shortage of houses on the market remains an obstacle heading into the spring selling season.

A digital revolution is reshaping India’s $34 billion gold market, with smartphones, e-wallets and flexible investment schemes drawing new buyers into a business dominated by traditional, face-to-face transactions. Source: Reuters