Spot gold was trading near a one-week high on Thursday after sharp gains in the previous session, as the U.S. Federal Reserve surprised markets by postponing a wind-down of its monetary stimulus.
U.S. gold futures jumped as much as 4.6 percent on the decision, while silver futures gained 7 percent.
FUNDAMENTALS
· Spot gold fell 0.1 percent to $1,362.66 an ounce by 0022 GMT after earlier hitting a one-week high of $1,367.86. Gold led the rally in commodities on Wednesday by gaining over 4 percent – its biggest daily rise since June 2012.
· Fed Chairman Ben Bernanke refused to commit to begin reducing the bond purchases this year, and instead went out of his way to stress the program was “not on a preset course”. In June he had said the Fed expected to cut back before year end.
· Many economists had expected a $10 billion reduction to the bank’s $85 billion monthly bond purchases.
· The Fed also cut its forecast for 2013 economic growth to a 2.0 percent to 2.3 percent range from a June estimate of 2.3 percent to 2.6 percent.
· U.S. stocks rallied to record highs after the Fed’s decision, while the dollar and bond yields tumbled.
· A White House official said Janet Yellen was front-runner for the top job at the U.S. central bank when Bernanke steps down. Yellen has been a staunch supporter of Bernanke’s super-easy monetary policy.
· India’s gold imports could be 750 tons in the current fiscal year ending March 31, 2014, a government official said, down 11 percent from last year as official measures curb purchases in what has been the world’s biggest bullion buyer.