Gold Up as Fed Policy Decision Fails to Provide Asset Tapering Timeline

© Reuters.

By Gina Lee

AiVIF.com – Gold was up on Thursday morning in Asia to its highest level in over a week. The U.S. Federal Reserve did not provide a timeline for its tapering plans in its latest policy decision, adding that it was “ways away” from considering interest rate hikes.

Gold Futures rose 0.81% to $1,814.20 by 12:16 AM ET (4:16 AM GMT), after hitting their highest level since Jul. 20 at $1,817.35 earlier. The dollar, which usually moves inversely to gold, edged down on Thursday after hitting a two-week low during the previous session.

The Fed handed down its decision on Wednesday, with asset tapering making it onto the agenda of the F two-day Federal Open Market Committee meeting that preceded it.

However, Fed Chairman Jerome Powell warned that the U.S. job market still had “some ground to cover” before the Fed begins to taper its assets, although he did not give a specific timeline. He also downplayed the risk posed by the continuous spread of COVID-19, and its Delta variant globally to the U.S. economic recovery.

In Asia Pacific, the Reserve Bank of Australia (RBA) is expected to delay its planned asset tapering as it hands down its policy decision in the following week. RBA had planned to begin asset tapering in September, with a review to follow a few months later. The central bank’s postponement comes four weeks after the plans were announced in the last RBA policy decision, with extended lockdowns in Sydney expected to take a toll on the economic recovery.

On the COVID-19 front, the Centers for Disease Control and Prevention said on Wednesday that 66.6% of U.S. counties had transmission rates of COVID-19 that are high enough to warrant the resumption of indoor masking policies.

In other precious metals, silver climbed 0.9%, palladium gained 0.6% and platinum rose 0.8%.