Gold prices edged lower on Friday, March 17, but still remained close to two-week highs thanks to a weaker U.S. dollar and the Federal Reserve’s dovish stance at its latest policy meeting.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery were down 0.09% at $1,226.05, just off the previous session’s two-week high of $1.231,40.
The April contract ended Thursday’s session 2.20% higher at $1,227.10 an ounce.Futures were likely to find support at $1,197.70, the low of March 15 and resistance at $1,231.40, Thursday’s high.
The greenback weakened broadly as the Fed’s policy statement was seen as less hawkish than expected by sticking to projections of three total rate hikes in 2017 and not four as some traders had hoped for.
As expected, the Fed increased interest rates by 25 basis points to 1.00% from 0.75%.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 100.07, the lowest since February 9.
A weak U.S. dollar usually supports gold, as it boosts the metal’s appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
Market participants were looking ahead to reports on U.S. industrial production and consumer sentiment due later in the day.
Elsewhere in metals trading, silver futures for May delivery slid 0.31% to $17.282 a troy ounce, while copper futures for May delivery dropped 0.58% to $2.662 a pound, Investing reports.