Gold was flat on Thursday after a jump in the previous session on falling Treasury yields and a weaker dollar, which were driven lower by a large but widely expected interest rate hike announcement from the U.S. Federal Reserve.
FUNDAMENTALS
* Spot gold was little changed at $1,832.86 per ounce as of 0034 GMT. U.S. gold futures rose 1% to $1,836.90.
* The Federal Reserve on Wednesday approved its largest interest rate increase in more than a quarter of a century to stem a surge in inflation that U.S. central bank officials acknowledged may be eroding public trust in their power, and being driven by events seen increasingly out of their hands.
* Global stocks rallied and government bond yields and the dollar retreated from multi-year highs on Wednesday as investors cheered the Fed’s decision to raise interest rates by three-fourths of a percentage point.
* Higher short-term U.S. interest rates increase the opportunity cost of holding bullion, which yields no interest.
* However, benchmark U.S. 10-year Treasury yields weakened after the announcement, helping demand for greenback-priced gold along with a slide in the dollar, and took bullion prices as much as 1.9% higher on the day.
* The Bank of England looks set to override its worries about a sharp slowdown in the British economy and raise interest rates again on Thursday as it tries to tackle an inflation rate on course for double digits.
* Spot silver firmed 0.1% to $21.68 per ounce, platinum gained 0.7% to $945.55, and palladium rose 0.5% to $1,869.24.
DATA/EVENTS (GMT) 0130 Australia Employment May 0130 Australia Unemployment Rate May 1100 UK BOE Bank Rate June 1100 UK GB BOE QE Corp June 1230 US Housing Starts Number May 1230 US Initial Jobless Clm Weekly 1230 US Philly Fed Business Indx June