Investing.com - Gold futures rallied to the highest level since mid-December on Thursday, extending strong gains from the previous session after the Federal Reserve pledged on Wednesday to keep rates at historically low levels until at least late 2014, a year longer than it had previously stated.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,707.15 a troy ounce during early European morning trade, gaining 0.41%.
It earlier rose by as much as 0.75% to trade at USD1,714.75 a troy ounce, the highest since December 9.
Futures were likely to find support at USD1,649.25 a troy ounce, Wednesday’s low and short-term resistance at USD1,718.75, the high from December 9.
Euro-denominated gold futures rose to a ten-week high of EUR1,307.45, only 4.9% away from September’s all-time high of EUR1,374.70.
At the conclusion of Wednesday’s policy-setting meeting, the Fed’s Open Market Committee said in a statement that economic conditions “are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.”
The new commitment replaces the statement that economic conditions were likely to stay at the historic low range of 0% to 0.25% until at least mid-2013.
At his press conference following the decision, Fed Chairman Ben Bernanke said that policy makers were “prepared to provide further monetary accommodation” and added that bond buying is “an option that’s certainly on the table.”
The comments fuelled speculation that the central bank may embark on a third round of quantitative easing, sparking a rally in gold prices. When the Fed announced the second round of quantitative easing in November last year, gold prices scored record highs for four consecutive sessions.
The central bank will provide an explicit discussion of FOMC member expectations for the balance sheet when the minutes to this meeting are released on February 15.
The Fed also left interest rates unchanged near zero, where they have been since December 2008, and set a long-term inflation goal of 2%.
Lower interest rates can give gold a lift, as it decreases the relative cost of holding on to the metal, which doesn't offer investors any similar guaranteed payout.
Meanwhile, in the euro zone, talks on a debt swap deal between Greece and its creditors were to resume in Athens later in the day.
An agreement is necessary if Greece is to get the next tranche of bailout funds that would prevent a devastating debt default. Greece does not have enough money to cover a EUR14.5 billion bond repayment due March 20.
Elsewhere on the Comex, silver for March delivery rose 0.1% to trade at USD33.15 a troy ounce, while copper for March delivery climbed 1.1% to trade at USD3.873 a pound.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,707.15 a troy ounce during early European morning trade, gaining 0.41%.
It earlier rose by as much as 0.75% to trade at USD1,714.75 a troy ounce, the highest since December 9.
Futures were likely to find support at USD1,649.25 a troy ounce, Wednesday’s low and short-term resistance at USD1,718.75, the high from December 9.
Euro-denominated gold futures rose to a ten-week high of EUR1,307.45, only 4.9% away from September’s all-time high of EUR1,374.70.
At the conclusion of Wednesday’s policy-setting meeting, the Fed’s Open Market Committee said in a statement that economic conditions “are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.”
The new commitment replaces the statement that economic conditions were likely to stay at the historic low range of 0% to 0.25% until at least mid-2013.
At his press conference following the decision, Fed Chairman Ben Bernanke said that policy makers were “prepared to provide further monetary accommodation” and added that bond buying is “an option that’s certainly on the table.”
The comments fuelled speculation that the central bank may embark on a third round of quantitative easing, sparking a rally in gold prices. When the Fed announced the second round of quantitative easing in November last year, gold prices scored record highs for four consecutive sessions.
The central bank will provide an explicit discussion of FOMC member expectations for the balance sheet when the minutes to this meeting are released on February 15.
The Fed also left interest rates unchanged near zero, where they have been since December 2008, and set a long-term inflation goal of 2%.
Lower interest rates can give gold a lift, as it decreases the relative cost of holding on to the metal, which doesn't offer investors any similar guaranteed payout.
Meanwhile, in the euro zone, talks on a debt swap deal between Greece and its creditors were to resume in Athens later in the day.
An agreement is necessary if Greece is to get the next tranche of bailout funds that would prevent a devastating debt default. Greece does not have enough money to cover a EUR14.5 billion bond repayment due March 20.
Elsewhere on the Comex, silver for March delivery rose 0.1% to trade at USD33.15 a troy ounce, while copper for March delivery climbed 1.1% to trade at USD3.873 a pound.