Dollar Boosts Gold After FOMC Meeting - almost everything beyond the US dollar was trading higher in the wake of the Fed’s statement

The Federal Reserve’s Open Market Committee concluded their March policy meeting and it certainly gave traders plenty to chew over heading into Q2. Traders were hyper-focused on whether the central bank would remove its “patient” pledge (before raising interest rates) and on that front, the Fed did not disappoint. As most analysts expected, Yellen and company removed the “patient” terminology; to use a gardening analogy, it looks like the economy’s proverbial “green shoots” have finally morphed into impatiens!

The central bank revised lower its forecasts for GDP, unemployment, and core PCE inflation for each year out to 2017. Interestingly, the central bank revised down its long-term forecast of the Non-Accelerating-Inflation Rate of Unemployment to 5.0-5.2%, meaning there is less urgency to raise rates with unemployment still well above that level.

Almost everything beyond the US dollar was trading higher in the wake of the Fed’s statement.

The second chart shows the Gold SPDR (GLD) bouncing $21 (+1.9%) off its November low. Gold benefits from a weaker dollar and lower interest rates.