Forexpros –
Forexpros – Gold futures moved marginally higher in Asian trade Thursday, as the decision from the U.S. Federal Reserve to “twist” the yield curve on government bonds failed to convince global investors that the move was enough to revive the U.S. economy.
On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,784.85 a troy ounce during early Asian trade, up 0.07%, after hitting a high of USDS1,779.55.
At the conclusion of its two-day Federal Open Market Committee Meeting Wednesday, the U.S. Federal Reserve said it would be replacing a portion of the short-term debt in its portfolio with longer-term Treasuries in a move known as “Operation Twist.”
The move was highly anticipated by the market and may lead to lower interest rates as well as avoid the resumption of the Fed’s controversial money creation program.
“There are significant downside risks to the economic outlook, including strains in global financial markets,” the Fed said in a statement, with a reference to the ongoing debt crisis in the euro-zone.
Gold futures were additionally supported following Tuesday’s decision by the International Monetary Fund to downgrade its global growth outlook for 2012 to 4%, down from a previous estimate of 4.3%.
The IMF revised down its forecast for U.S. economic growth to 1.5% for the remainder of 2011 and 1.8% in 2012, down from its June estimate of 2.5% and 2.7% respectively, adding that the world economy had entered a “dangerous new phase.”
Growth projections for the euro-zone were also revised down, with the IMF citing the ongoing sovereign debt crisis in the single currency bloc.
European closed lower in Wednesday’s session, with France’s CAC 40 falling 1.61%, Britain’s FTSE 100 lost 1.4%, and Germany’s DAX surrendered 2.47%.
The Fed’s announced program left Wall Street dissatisfied, as the Dow Jones Industrial Average sank 2.49%, the Nasdaq Composite Index fell 2.01%, and the S&P 500 slumped 2.94% by the end of Wednesday trade.
Elsewhere on the Comex, silver for December delivery rose 0.25% to trade at USD39.81 a troy ounce, while copper for December delivery gained 0.61% to trade at USD3.719 a pound.
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