Daily Gold Update

Source: MarketWatch

San Francisco— Gold futures moved higher in electronic trading Wednesday after the Federal Reserve kept interest rates steady but raised concerns over inflation. Gold prices had closed with a loss of 1%, tracking weakness in the oil market ahead of the Fed decision, which came shortly after metals trading on the New York Mercantile Exchange ended. Gold for August delivery was last at $886.30 an ounce on Globex as of 2:30 p.m. EDT. It dropped $9.30 Wednesday to close at $882.30 an ounce on the New York Mercantile Exchange.

The Federal Reserve has sharpened its focus on inflation, saying Wednesday that the upside risks to inflation have increased. The language was included in a statement after the Fed held its target for short-term interest rates steady at 2%. "The Fed knows they are stuck in a corner," said Peter Spina, an analyst at GoldSeek.com. "They have strong inflationary pressures to contend with and a dangerously fragile economy….Despite some recent rhetoric from the Fed, they have decided to sacrifice the dollar going forward and this will be the key driving force in the gold price in the coming months, years," he said in emailed comments. See full story.