* Gold neutral in $1,626-$1,648.91-technicals
* Coming Up: U.S. Jobless claims Weekly; 1230 GMT
(Updates prices, adds quotes)
By Lewa Pardomuan
SINGAPORE, April 26 (Reuters) – Gold held above $1,644 on
Thursday after the U.S. Federal Reserve’s meeting on interest
rates offered few surprises, but gains in equities and
expectations the central bank could do more if necessary to lift
the economy may eventually spur buying from investors.
The Fed has already engaged in two rounds of asset purchases
totalling $2.3 trillion, known as quantitative easing, to drive
down interest rates and stimulate the economy. The latest QE
helped push up commodity prices by providing cheap money to
investors who placed it in risky assets.
Fed Chairman Ben Bernanke said U.S. monetary policy was
“more or less in the right place” even though the central bank
would not hesitate to launch another round of bond purchases if
the economy were to weaken.
Gold was little changed at $1,644.46 an ounce by 0233
GMT, having fallen to a low of $1,641.15. It hit a low at
$1,623.90 on Wednesday in a knee-jerk sell-off after the Fed
disappointed investors who had hoped for another round of asset
purchases.
“I think going forward, gold will probably trade in the
direction of where the macro-economy is going. If we hear fresh
news from the euro zone that the debt crisis is reemerging, then
we could see some safe have demand,” said Lynette Tan, an
analyst with Phillip Futures.
“I am still looking at gold to trade in a range of $1,600 to
$1,660. For Q2, I am not looking at gold to make large price
moves. Recently, physical demand for gold has fallen, especially
in India, which means gold will lack the physical support that
it needs to move prices higher.”
Sales for Akshaya Tritiya, the second biggest gold buying
festival in top gold consumer India after Dhanteras, are
estimated to have fallen by a half to 10 tonnes this year on
high prices and as inflation crimped savings.
Shares across Asia gained on Thursday, retaining positive
momentum as the Fed reassured markets that it will keep its very
accommodative stance to support growth, and optimism grew over
strong corporate earnings after Apple Inc’s robust results.
Gold rallied to a 2012 high around $1,790 in late February
after the Fed at the time said it would keep interest rates near
zero until at least by the end of 2014.
Investors will also scrutinise efforts by Europe to solve
the debt crisis after European Central Bank President Mario
Draghi called for a “growth compact” but put the onus on euro
zone governments to shape-up their economies.
Bullion raced to a record of around $1,920 last September on
fears the euro debt crisis could stall global growth.
“We think that in the days ahead, focus will revert to the
still-festering European debt crisis and the fact that we are in
a synchronized global slowdown, likely keeping pressure on the
central banks to remain accommodative,” INTL FC Stone analyst
Edward Meir wrote in a note.
“In addition, European elections, at least from what we have
been able to judge thus far, are generating a strong backlash
towards austerity measures and a clear desire to pursue more
definitive growth policies.”
U.S. gold for June added $3 to $1,645.30 an ounce.
In the currency market, the dollar floundered at three-week
lows against a basket of major currencies, having fallen prey to
the Fed’s dovish stance on policy.
Precious metals prices 0233 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1644.46 0.48 +0.03 5.16
Spot Silver 30.67 -0.02 -0.07 10.76
Spot Platinum 1548.70 2.70 +0.17 11.18
Spot Palladium 660.97 3.39 +0.52 1.30
COMEX GOLD JUN2 1645.30 3.00 +0.18 5.01 3928
COMEX SILVER MAY2 30.67 0.31 +1.03 9.87 1350
Euro/Dollar 1.3222
Dollar/Yen 81.22
COMEX gold and silver contracts show the most active months
(Editing by Sugita Katyal)
