By Gina Lee
Investing.com – Gold was up on Thursday morning in Asia, continuing its rally from the previous session after Wednesday’s U.S. Federal Reserve policy meeting decided on holding the benchmark rate near zero.
Most officials forecast the benchmark rate will remain near zero through 2022.
Gold futures were up by 1.19% at $1,741.25 by 12:24 AM ET (5:24 AM GMT), with investors turning to the safe-haven yellow metal.
Investor sentiment also soured as the Fed quarterly predictions pointed to a long road towards economic recovery from the COVID-19 virus in the U.S. GDP is forecast to contract by 6.5% in 2020 and unemployment to fall to 9.3% in the final three months of the year from May’s 13.3%.
Fed Chair Jerome Powell reiterated after the meeting that the central bank is committed to “do whatever we can, for as long as it takes."
“The reason that ultra-loose monetary policy is a positive for gold is that it applies downward pressure to long-term U.S. real yields...[that] effectively increases the appeal of the precious metal relative to U.S.-interest earning assets,” Vivek Dhar, an analyst at Commonwealth Bank of Australia (OTC:CMWAY), told Bloomberg.