By Gina Lee
Investing.com – Gold was down on Thursday morning in Asia, with investors turning to riskier assets after the U.S. Federal Reserve reiterated its continued policy support in its and boosted hopes for the economic recovery from COVID-19.
inched down 0.09% at $1740.05 by 12:41 PM ET (4:41 AM GMT).
The Fed’s released on Wednesday emphasized the “highly uncertain” path to recovery, with the central bank not planning to scale back its massive bond-buying program until the recovery is further along the path.
Officials also downplayed the risk of inflation from the recent surge in Treasury yields, insisting that the surge reflects stronger growth prospects. These comments in turn prompted investors to scale back their most-aggressive positioning for interest rates to start rising by the end of 2022.
“We expect the Fed to remain accommodative even if inflation rises above their target for some time… the key for gold will be how much inflation overshoots a desirable level and what effect that has on real yields,” Guardian Gold Australia business development manager John Feeney told Bloomberg.
Meanwhile, Fed Chairman Jerome Powell will take part in a panel about the global economy later in the day.
More U.S. stimulus could also be around the corner, with U.S. President Joe Biden appealing for U.S companies to foot a large part of the $2 trillion-plus bill for his infrastructure plan. However, he indicated a willingness to negotiate the exact amount to be paid.
Helping to cap the yellow metal’s losses, however, was the languishing near more than two-week lows on Thursday.
In other precious metals, silver fell 0.3% and palladium edged down 0.2%, while platinum inched up 0.1%.
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