Gold Ends Higher As Fed Holds Rates Steady; Gains 3.1% For Week

(RTTNews) - Gold futures rallied to end sharply higher on Friday in the aftermath of yesterday's Federal Reserve decision not to raise interest rates.

For the week, gold prices gained about 3.1 percent.

Fearing the global economic slowdown, the Fed held steady on interest rates instead of hiking them for the first time in a decade. However, most Fed officials have said that a rate hike would be appropriate this year given the recent pace of economic activity.

The central bank's economic growth projections were lowered, and policy makers expressed concerns over the economic headwinds including problems in China.

If the Fed is going to raise rates this year, it will likely be in December since there is no scheduled press conference after the upcoming October meeting. Yellen said that October is a "live meeting" that could produce a rate hike, but most Fed watchers think she will want a chance to soothe investors if there is a market tantrum.

Gold for December delivery, the most actively traded contract, surged $20.80 or 1.9 percent, to settle at $1,137.80 an ounce, on the Comex division of the New York Mercantile Exchange on Friday.

On Thursday, gold prices for December delivery dropped $2.00 or 0.2 percent, to settle at $1,117.00 an ounce, ahead of the Federal Reserve's monetary policy meet outcome.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 678.18 tons on Friday from its previous close.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 94.79 on Friday, up from its previous close of 94.54 in late North American trade on Thursday. The dollar scaled a high of 94.84 intraday and a low of 94.06.

The euro trended lower against the dollar at 1.1362 on Friday, as compared to its previous close of 1.1437 in North American trade late Thursday. The euro scaled a high of 1.1461 intraday and a low of 1.1351.

On the economic front, a report from the Conference Board on Friday showed a slight uptick in its index of leading U.S. economic indicators in August, suggesting economic growth will remain moderate into next year.

The Conference Board's leading economic index inched up 0.1 percent in August, while revised data showed no change in July. Economists expected the index to rise by 0.2 percent compared to the 0.2 percent drop originally reported for the previous month.

Eurozone current account surplus declined in July as the deficit on secondary income widened from June, the European Central Bank reported Friday. The current account surplus decreased to EUR 22.6 billion in July from EUR 24.9 billion in June.