Gold prices ended higher Thursday, as a Federal Reserve policy update that was read as mostly dovish by investors, helped to lift prices to their highest finish since mid-June.
August gold GCQ7, +0.86% rose $10.60, or 0.9%, to settle at $1,260 an ounce—the highest session-end level since June 14, according to FactSet data. September silverSIU7, +0.67% also climbed 11.4 cents, or 0.7%, to $16.573 an ounce.
Prices for the precious metal got boost as a key gauge for the U.S. dollar touched its lowest level in more than year in the wake of the central bank’s policy statement, but the index has since strengthened a bit, with the ICE U.S. Dollar Index DXY, +0.54% trading up 0.2% at 93.90 after a low at 93.15.
“Currencies are at a critical inflection point and must be watched if you are trading gold,” said Bill Baruch, chief market strategist at iiTRADER.
Because commodities tend to be traded in dollars, the relationship between commodities and the buck is usually inverse, as moves in the U.S. unit can influence appetite for those commodities from buyers using weaker currencies.
Ahead of the Fed’s Wednesday afternoon release, gold futures had dropped for a third-straight session to settle at their lowest level in a week. They bounced back in after-hours trading and early Thursday.
The Fed Wednesday stood pat on interest rates, as expected, and said it would start reducing its $4.5 trillion balance sheet “relatively soon.” The central bank had already appeared to be unified on its plan to start selling off part of portfolio in Treasurys and mortgage-backed bonds acquired over the past decade to help stabilize the U.S. economy.