Gold Falls 1.8 Pct As Dollar Rises After Fed Statement
NEW YORK/LONDON, March 19 (Reuters) - Gold fell 1.8 percent on Wednesday as the dollar rallied after the Federal Reserve dropped a set of guideposts it had been using to help the public anticipate when it would finally start bumping overnight borrowing costs up from zero.
In announcing its view on future rates after a two-day policy meeting, the U.S. central bank said it could keep interest rates low even after the U.S. job market returns to full strength and inflation rises to the central bank's target.
It also proceeded with its well-telegraphed reductions to its massive bond-buying stimulus, announcing it would cut its monthly purchases of U.S. Treasuries and mortgage-backed securities to $55 billion from $65 billion.
"Gold's appeal as an inflation hedge is not as strong after the Fed's moves. It was already down on the reduction in geopolitical risk, so the combination of the two is pretty powerful," said James Steel, chief precious metals analyst at HSBC.
Earlier in the session, gold came under pressure after Russian President Vladimir Putin signed a treaty on Tuesday making Crimea part of Russia again but said he did not plan to seize any other regions of Ukraine.