The U.S. central bank signaled two more rate increases this year instead of the four hinted at back in December, as the policy makers “continue to see risks” to the economy. The dovish outlook sent the dollar sharply lower and spurred a rally in dollar-denominated commodities such as gold.
The Fed announcement came 30 minutes after gold futures settled on Wednesday.
“Never underestimate the power of the Fed to impact the markets. The doves are clearly winning the argument resulting in yesterday’s dovish announcement, which dragged the Fed back far more in line with market views on the potential for rate hikes in 2016,” said Richard Perry, analyst at Hantec Markets, in a note.
Gold for April delivery GCJ6, -0.16% rose $35.20, or 2.9%, to settle at $1,265 an ounce.
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