September 21, 2016
Gold Declines as BOJ’s Policy Framework Shift Buoys the Dollar
(Bloomberg) - Gold dropped after the Bank of Japan decided to take additional action to try to support the country’s recovery, boosting the dollar in the first of the day’s major monetary-policy announcements ahead of a statement from the Federal Reserve.
Bullion for immediate delivery fell as much as 0.5 percent to $1,307.88 an ounce, and traded at $1,311.86 at 1:01 p.m. in Singapore, according to Bloomberg generic pricing. In the minutes immediately after the BOJ’s announcement, the metal had risen as much as 0.4 percent.
Gold rallied in the first half partly on the back of low and negative interest rates, which add to bullion’s appeal. While the BOJ kept the benchmark rate at a negative 0.1 percent, Governor Haruhiko Kuroda pledged to expand the monetary base until inflation is stable above 2 percent, and may now vary the target to control the yield curve instead of maintaining a fixed annual increase. The Bloomberg Dollar Spot Index climbed as much as 0.3 percent.