Gold clings to gains after Fed announcement

A melter casts an ingot of 92.96 percent pure gold at a procession plant of the Olimpiada gold operation, owned by Polyus Gold International company, in Krasnoyarsk region, Eastern Siberia, Russia.
Ilya Naymushin | Reuters

Spot gold pared its gains after the Fed said it would leave interest rates unchanged amid slowing economic activity.

Minutes before the announcement, spot gold traded up 0.56 percent at $1,249.86. After the Fed's announcement, gold fell briefly, trading down 0.19 percent by 2:02 PM ET, but tried for a rebound, last up 0.2 percent.

Gartman's bull market play on gold

Earlier in the day, gold rose for a third straight session as weaker than expected U.S. data weighed on the dollar ahead of the Federal Reserve's monetary policy decision.

Data on Tuesday showed orders for long-lasting U.S. manufactured goods rebounded far less than expected in March, suggesting that business spending and economic growth were weak in the first quarter. Another report showed an ebb in consumer confidence in April. The U.S. central bank raised rates in December for the first time in nearly a decade.

Gold, already on its way up, may head even higher: Technician

Gold is highly sensitive to rising interest rates, which lift the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced.

Bullion has rallied 17 percent this year on speculation that the Fed might not raise rates this year amid uncertainty over the global economy.

Expect silver to stay strong: Trader

A slump in demand from key Asian consumers is likely to push gold prices lower in the short term, GFMS analysts at Thomson Reuters said in a report on Tuesday.

Global gold demand tumbled by 24 percent year on year to 781 tonnes in the three months to March 31, its weakest quarter in seven years, GFMS said.

Among other precious metals, silver futures were up 0.61 percent at $17.22 an ounce, platinum futures gained 0.5 percent to $1,024.90 and palladium futures were up 0.82 percent at $608.85.