Prices in electronic trading were volatile following Fed decision
Bullion prices ended higher on Wednesday, 29 January 2014. Gold futures settled higher on Wednesday as fears of an emerging-market crisis and a sharp decline for equities on Wall Street buoyed the metal's investment appeal. But prices in electronic trading were volatile, moving below and then above the Comex closing level following the Federal Reserve's decision to cut its bond-buying program on Feb. 1 by another $10 billion a month to $65 billion. The move had been widely expected.
Before the Fed news, gold for February delivery rose $11.40, or 0.9%, to settle at $1,262.20 an ounce on the Comex division of the New York Mercantile Exchange. April gold, which is also among the most-active contracts, settled at $1,262.20 an ounce, up $11.70, or 0.9%.
Silver, saw its March contract add 5 cents, or 0.3%, to $19.55 an ounce.
Wednesday afternoon's U.S. Federal Reserve's Open Market Committee (FOMC) statement on its monetary policy showed the Fed did another $10 billion per month tapering of its quantitative easing, now at $65 billion in month in bond-buying. That was the general belief in the market place, albeit not a clear consensus. The FOMC statement also reiterated that U.S. interest rates will remain extremely low.
The major news of the day came from Turkey, as its central bank raised its key lending rate sharply, up to 12%, to try to stave off the deflating Turkish lira. The move by Turkey's central bank acted to calm the market place for just a few hours, as the U.S. stock market fell under pressure by mid-morning U.S. trading. India's central bank also raised its interest rates this earlier week. The South African central bank raised its interest rates on Wednesday, following Turkey's move.
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