Gold price claws its way higher on Fed meeting and geopolitics

London (May 3)  Gold prices gained on Thursday after the U.S. central bank reassured investors that increases to interest rates would be gradual, with geopolitical uncertainties also providing support.

Spot gold rose for a second session, firming by 0.6 percent to $1,312.26 an ounce by 0940 GMT, while U.S. gold futures for June delivery added 0.6 percent to $1,312.80.     

The U.S. Federal Reserve said that inflation on a 12-month basis was "expected to run near the committee's symmetric 2 percent objective".            

"Yesterday's FOMC meeting didn't spark much fireworks, but it eased concerns over whether the Fed was going to stick to its gradual tightening policy, which I believe they are," said Ole
Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
    "The key change is they added the word, 'symmetric', which
was taken as a sign that they would allow inflation to
overshoot, which is positive for gold."
    Gold is highly sensitive to rising U.S. interest rates
because it becomes less attractive compared with
interest-bearing assets.
    Uncertainties were also providing a supportive background
for bullion, including U.S.-China trade talks and the potential
U.S. withdrawal from the Iranian nuclear accord.
    "Safe-haven buying has been absent of late ... But there
have been some signals for the past few days that the
(U.S.-China) negotiations won't be as smooth as expected. That
would definitely be a focus, particularly now we have got past
the FOMC meeting," said ANZ analyst Daniel Hynes.
    Spot gold could bounce again towards resistance at $1,317 an
ounce, having found strong support at $1,302, said Reuters
technical analyst Wang Tao.            
    Meanwhile, gold demand has made its weakest start to a year
since 2008, the World Gold Council said on Thursday, with
stagnant prices and the threat of rising interest rates leading
investors to seek better returns elsewhere.            
    Among other precious metals, spot silver rose 1
percent to $16.51 an ounce, platinum climbed by 1.5
percent to $903 and palladium was up 1.4 percent at
$972.55.