By Gina Lee
Investing.com – Gold was up on Thursday morning in Asia, with the U.S. Federal Reserve’s pledge to keep interest rates low until an economic recovery is secure giving the yellow metal a boost. Investors also continue to monitor progress on the latest U.S. stimulus measures as well.
Gold futures were up 0.51% at $1,868.55 by 11:14 PM ET (4:14 AM GMT). The dollar was down on Thursday, which also gave gold a boost.
The Fed’s policy decision, handed down on Wednesday after the central bank’s two-day policy meeting, will continue to place interest rates near zero for years to come. The Fed also promised to continue its bond-buying program until “substantial further progress” in restoring full employment and hitting its 2% inflation target.
Fed Chairman Jerome Powell also argued that the case for fiscal stimulus is “very, very strong”, with the U.S. continuing to grapple with a second wave of COVID-19 cases.
Following the Fed, some more central banks will hand down their policy decisions over the next two days. The Bank of England, the Mexican, Swiss and Indonesian central banks will hand down their policy decisions later in the day. Decisions from the Bank of Japan and the Bank of Russia will follow on Friday.
The Bank of England is expected to refrain from further stimulus in its decision, with the possibility of a no-deal Brexit threatening to worsen the economic woes already brought on by a second wave of COVID-19 cases.
The U.K. and the European Union are also closer to striking a deal. However, caution on whether a deal can be reached before the deadline remains.
“I cannot tell you whether there will be a deal or not. But I can tell you that there is a path to an agreement now. The path may be very narrow, but it is there,” European Commission President Ursula von der Leyen told the European Parliament on Wednesday.
Meanwhile, Congress was reportedly “closing in on” approving a $900 billion stimulus bill on Wednesday. The bill, including $600 to $700 stimulus checks and extended unemployment benefits, awaits the passage of a $1.4 trillion spending bill for the fiscal year beginning on Oct. 1 by Friday to avert a government shutdown.
Data released by the U.S. on Wednesday also indicated a slowdown in the economic recovery. U.S. retail sales fell 1.1% month-on-month in November, more than the 0.3% fall in forecasts prepared by Investing.com and October’s 0.1% fall.