Dec 15, 2021 11:30PM ET
Gold costs rose in Asia on Thursday morning as the dollar debilitated later the US Federal Reserve declared it would speed up its resource decrease and raise loan fees in its most recent choice.
By 11:25 p.m. ET (4:25 a.m. GMT), gold futures were up 1.00% at $1,782.15 per ounce. The dollar, which normally moves inversely to gold, weakened slightly on Thursday.
The yellow metal recovered to a two-month low after an initial drop of almost 1% after the Fed announced its monetary policy decision on Wednesday. It will accelerate its asset reduction program to $30 billion a month. It also left its interest rate unchanged but forecasted three quarter-point rate hikes in 2022, three more in 2023, and two more in 2024.
In its new economic forecasts, the central bank expects inflation to be 2.6% in 2022, down from the 2.2% forecast in September 2021.
The market was expecting a hawkish stance from the Fed, and that's what it got with the dot plot, precious metals trader Tai Wong told Reuters.
The market is happy that the Fed is a bit spooked and doesn't want to be too far behind the curve. For gold, the key technical level is $1,750; a break well below that could lead to a slide in the final days of the year. "
Other investors also remained optimistic.
"The risk that the economy could fall into recession in 2023 does not seem so farfetched. Gold's weakness could be nearing its end as the Federal Reserve runs on autopilot until the March meeting, "OANDA senior market analyst Edward Moya told Reuters.