Gold rose 1.5 percent in Europe on Thursday, supported by a softer dollar after the U.S. Federal Reserve's decision to leave interest rates unchanged...
Gold rose 1.5 percent in Europe on Thursday, supported by a softer dollar after the U.S. Federal Reserve's decision to leave interest rates unchanged, and as traders scaled back expectations for further rate rises.
Gold rose to $893.90/894.90 an ounce at 0959 GMT from $879.60/880.60 an ounce late in New York on Wednesday, when it dropped to its lowest level in a week -- $873.50 -- due to weaker oil prices.
The Fed, after opting to hold interest rates steady after its meeting on Wednesday, expressed greater confidence over growth and said that while inflation remains a problem, rising prices should moderate later in the year.
U.S. interest rate futures suggested expectations for an rate hike in August fell to 33 percent in the wake of the Fed's comments from 48 percent prior to the decision.
The dollar slipped to a two-week low against the euro following the Fed announcement, although it has since steadied.
But while prices remain firm, gold is unlikely to find much impetus to push higher in the near future and should remain rangebound under $900 an ounce, said Standard Bank analyst Walter de Wet.
Demand is likely to remain sluggish over the summer, he said, while weakness in the euro zone should limit losses in the dollar.
Towards the autumn, he added, the market could pick up again if there is no let-up in the problems affecting the financial sector and if the dollar weakens further.
Oil, the other main external driver of gold prices, was steady above $134 a barrel, after slipping yesterday as the U.S. Dept of Energy reported an unexpected rise in stockpiles.
In industry news, Gold Fields Limited said it has shut down a shaft of its Kloof Gold Mine in South Africa after two employees were killed early on Thursday following an earth tremor.