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Gold up after FOMC meeting results

Xinhua, June 17, 2016 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange rose on Thursday as the market digested the news from the Federal Open Market Committee meeting.

The most active gold contract for August delivery rose 10.10 U.S. dollars, or 0.78 percent, to settle at 1,298.40 dollars per ounce.

Gold settled at its highest level since Jan. 22, 2015 on Thursday and it already advanced for seventh trading days in a row, according to datas collected by Xinhua reporter.

Gold was given support as the June Federal Open Market Committee (FOMC) meeting announcement, traders believe that the Fed will delay the July interest rate increase. The minutes led traders to believe that the Fed may raise rates from 0.50 to 0.75 during the September FOMC meeting. According to the CMEGroup's Fedwatch tool, the current implied probability of a hike from 0.50 to 0.75 is at 7 percent for the July meeting, 24 percent at the August 2016 meeting, and 25 percent at the September 2016 meeting.

Gold was given further support as the U.S. Dollar Index fell by 0.03 percent to 94.57 as of 17:45 GMT. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.

A report released by the U.S. Department of Labor on Thursday showed the consumer price index growing by a worse-than-expected 0.20 percent during the month of May. Analysts note that while this figure does match up with the Fed goal of 2 percent per year inflation rate, it does not indicate enough pressure for the Fed to see the need to raise rates immediately.

Silver for July delivery added 10.40 cents, or 0.59 percent, to close at 17.607 dollars per ounce. Platinum for July delivery rose 3.5 dollars, or 0.36 percent, to close at 978.30 dollars per ounce. Endit