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CHICAGO, March 16 (Xinhua) -- Gold futures on the COMEX division of the New York Mercantile Exchange rose sharply on Thursday despite the interest rate hike announced by the Federal Reserve the previous day.
The most active gold contract for April delivery rose 26.4 U.S. dollars, or 2.16 percent, to settle at 1,227.10 dollars per ounce.
Gold was given extensive support as the U.S. Federal Open Market Committee (FOMC) increased rates but signaled a slower pace of further rate hikes. FOMC hinted that they will act cautiously when making interest rate decisions.
Many investors believe the Fed may raise rates from 1.00 to 1.25 during the June FOMC meeting. According to the CMEGroup's Fedwatch tool, the current implied probability of a hike from 1.00 to 1.25 is at 4 percent at the May meeting and 51 percent for the June meeting, along with a 2 percent chance of an increase to a 1.5 rate.
Meanwhile, a business outlook survey just released by the Philadelphia Federal Reserve showed its key General Business Conditions Index now at a 32.8 level. Analysts note that this was slightly better-than-expected and likely put pressure on the precious metal.
Gold was prevented from rising further as the U.S. Dollar Index rose by 0.07 percent to 100.61 as of 1815 GMT. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall.
The U.S. Dow Jones Industrial Average was mostly unchanged, falling by 4 points, or 0.02 percent as of 1815 GMT. Analysts note that when equities post losses, the precious metal usually goes up, as investors are looking for a safe haven, while the opposite is true when U.S. equities post gains.
Silver for May delivery rose 40.7 cents, or 2.41 percent, to close at 17.33 dollars per ounce. Platinum for April delivery added 21.6 dollars, or 2.31 percent, to close at 958.4 dollars per ounce.
