Gold was up on Thursday morning in Asia on the back of the U.S. Federal Reserve maintaining its easy monetary policy as it handed down its latest policy decision. A weakening dollar provided further support to the safe-haven yellow metal.
Gold futures were up 0.59% to $1,784.45 by 12:42 PM ET (4:42 AM GMT). The dollar, which usually moves inversely to gold, inched down on Thursday.
The Fed kept its interest rate unchanged at 0.25%, and kept its bond-buying program steady when it handed down its decision on Wednesday. Fed Chairman Jerome Powell also reiterated his dovish stance on interest rate hikes, insisting that any inflation is temporary.
The Fed’s stance comes even as the U.S. continues its economic recovery from COVID-19. However, the U.S. trade deficit in goods climbed to a record high in March 2021, an indication that trade was a drag on economic growth in the first quarter of the year. This was in turn offset by domestic demand amid unprecedented government aid.
Also on investors’ radars was the prospect of further U.S. stimulus packages. Joe Biden, in his first address to a joint session of Congress in his role as president, pushed for a new spending and tax-credit package. The package, alongside an earlier infrastructure and jobs plan, will cost the country around $4 trillion.
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