Investing.com - Gold prices held steady at three-week highs on Friday, as the Bank of Japan’s stimulus measures disappointed market expectations and as the Federal Reserve’s decision to leave its monetary policy unchanged continued to support.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery were little changed at $1,341.75.
The August contract ended Thursday’s session 0.50% higher at $1,341.20 an ounce.
Futures were likely to find support at $1,330.10, Thursday’s low and resistance at $1,356.90, the high from July 12.
At the conclusion of its monthly policy meeting on Friday, the BoJ announced a modest increase in purchases of exchange-traded funds (ETFs), but maintained its base money target at 80 trillion yen as well as the pace of purchases for other assets.
The central bank also kept negative interest rates unchanged at -0.1%.
The move disappointed expectations for a stimulus package of nearly 28 trillion yen promised by Prime Minister Shinzo Abe earlier in the week to boost the economy.
The BoJ’s decision came after the Fed left interest rates unchanged at the conclusion of its two-day policy meeting on Wednesday, in a widely expected move, which weighed heavily on the U.S. dollar.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.41% at 96.29, the lowest level since July 15.
Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
In its monthly policy statement, the Fed said that “near-term risks to the economic outlook have diminished” and that the labor market has “strengthened”.
Market participants were eyeing the release of second quarter U.S. economic growth data, due later Friday for further indications on the strength of the economy.
Elsewhere in metals trading, silver futures for September delivery slipped 0.12% to $20.168 a troy ounce, while copper futures for September delivery dropped 0.68% to $2.195 a pound.