Oil prices rose about 1.6 percent as the dollar fell and US crude inventories recorded a surprise drop.
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Miners led the European stock market higher as the Fed’s decision to keep rates unchanged pushed down the USA dollar on currency markets, thereby making commodities cheaper for holders of other currencies.
The Fed’s decision to keep rates low also caused bond prices to rise and the USA dollar to fall against other major currencies, which in turn helped boost prices of commodities, which are denominated in dollars.
The Toronto Stock Exchange’s S&P/TSX composite index ended down 99.25 points, or 0.67 percent, at 14,697.93. This news story is related to Print/151859-Gold-slips/ – breaking news, latest news, pakistan ne.
The dollar index dropped 0.5 per cent to 95.189.
Turning to USA markets, the Dow Jones industrial average and S&P were both down 0.5 percent, while the dollar softened 0.3 percent to $1.1238 against the euro.
“The Fed lowering its medium-term rate guidance path while keeping a rate hike in play at the end of this year has left the dollar very finely balanced”, said Yujiro Goto, currency strategist at Nomura. While traders are placing odds of a Fed move in December at 60 percent, up from 12 percent in early July, such a move is already “baked into the gold price”, Mariann Montagne, an analyst at Gradient Investments, said Wednesday. The bigger worry for him, he said, was that the Fed will raise rates too soon rather than too late.
The central bank slowed the pace of future hikes and cut its longer run interest rate forecast to 2.9 percent from 3 percent, but sent a strong signal for a move by the end of this year.
Bond prices rose. The yield on the 10-year Treasury note fell to 1.63 percent.
The dollar was up 0.2% at ¥100.99. The odds rise to about 59 percent for December, according to the CME Group’s FedWatch tool.
FedEx shares gained 6.9 percent after the package delivery company’s profit report.
US crude rose 2.29 percent after data showed a bigger-than-expected draw in inventories. Technical momentum also helped support higher prices on Thursday with the S&P 500 turning positive for the month.
Oil prices showed no sign of fading though, having added as much as 3 percent on Wednesday after a third surprise weekly drop in USA crude stockpiles boosted the demand outlook in the world’s largest oil consumer. It rose as much as 1.7 percent in the previous session.
For those companies, Goldman sees an average 46 percent upside to normalized earnings if rates approach 3 percent.
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Earlier, the euro touched its highest level against the dollar in almost a week at $1.1250.
