Gold prices inched up on Friday but were still near six-week lows it hit in the previous session after the conclusion of the Federal Reserve’s meeting earlier in the week.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange inched up 0.01% to $1,187.50 a troy ounce by 2:10AM ET (06:10 GMT).
On Wednesday, the Fed increased the overnight funds rate to a range of 2.00% to 2.25%.
Fed Chairman Jerome Powell discussed trade related issues, saying that the central bank had heard a “rising chorus of concerns from businesses all over the country.”
He also indicated there was no change in his thinking on monetary policy, although the Fed made an amendment to the statement by removing the use of “accommodative” to describe its stance on monetary policy.
The prospect of further interest rate increases and higher U.S. bond yields dampen appeal for the bullion, which offers no yield. They also tend to boost the dollar, making dollar-denominated gold more expensive for holders of other currencies.
Meanwhile, the U.S. dollar index which tracks the greenback against a basket of its peers was trading at 94.60, down 0.01%, following its overnight rally on the back of economic policy uncertainty in Italy.
“Throughout most of the overnight trading session, there were growing doubts Italy’s coalition government would manage to timely agree on a 2019 budget target,” Elias Haddad, senior currency strategist at Commonwealth Bank of Australia, said in a morning note.
Official government data showed on Thursday that U.S. gross domestic product grew at a 4.2% in the second quarter, the fastest in nearly four years. Separately, another report showed durable goods rose 4.5% in August.