Gold prices opened in the red on Thursday after the US Federal Reserve kept its monetary policy unchanged without promising any more aid, supporting the dollar as the preferred safe haven asset.
Investor sentiment reversed later in the session as bullion recovered from earlier losses. Spot gold was up 0.5% to $1,853.65 an ounce by 11:40 a.m. EST, while US gold futures gained 0.3% and traded at $1,851.10 an ounce.
Nevertheless, the precious metal has lost about 2.8% so far this month, on course for its worst January performance since 2011.
“If I look at gold, it seems the market was looking for a more dovish Fed,” Giovanni Staunovo, an analyst at UBS Group AG, told Bloomberg. “I still believe we will see a higher price this quarter, supported by low(er) US real rates and a weaker US dollar.”
Bullion’s slow start to the year may be explained by weaker demand for gold during the past quarter.
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