The yen also hit a four-week high of 100.10 against the greenback and the overnight drop in US government bond yields saw German Bund yields move decisively back into negative territory.
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RBC Capital Markets said in a note: “Despite gold’s jump yesterday, we think it will remain well short of year-to-date highs, and while it will certainly experience continued volatility in line with a number of other macro assets, we remain cautious through year-end”, RBC said. It also projected a less aggressive rise in rates next year and in 2018, and cut its longer-run interest rate forecast to 2.9 per cent from 3.0 per cent.
That left investors feeling that any monetary policy tightening would be leisurely at best.
Traders generally had not expected the Fed to raise rates, with bets before the meeting of only an 18 percent chance of a hike, according to the CME FedWatch website.
The market-friendly Fed rate decision pushed down yields on USA government bonds.
USA crude was up 43 cents to $45.77 per barrel.
The dollar index declined 0.4 percent on Thursday, and was on track to mark the second straight day of losses after the central bank’s decision. The US currency climbed compared to a basket of rival currencies on Friday, and this decreased interest in the dollar-denominated commodity by holders of worldwide currencies.
The major gainer against the dollar was the Norwegian crown, which rose more than 2 per cent after Norway’s central bank left its main interest rate unchanged and suggested further rate cuts may not be needed because of a pickup in the economy. There have now been nearly 200 cuts worldwide since the start of previous year.
Oil prices showed no sign of fading though, having added as much as 3 percent on Wednesday after a third surprise weekly drop in US crude stockpiles boosted the demand outlook in the world’s largest oil consumer.
Dow e-minis were down 20 points, or 0.11 percent, with 13,008 contracts changing hands. Brent crude futures rose 0.8 percent to $47.21, adding to gains of 2 percent on Wednesday.
“The Norges Bank had a meeting today and they sounded much less dovish than what the market had expected”, said Charles St-Arnaud, senior strategist and economist at Nomura Securities International in London.
Earlier, the euro touched its highest level against the dollar in almost a week at $1.1250.
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On Friday, data showed that US manufacturing activity in September grew at the slowest pace in three months.
