Gold retains losses in Asia

Gold retained losses from overnight on Thursday, as the Federal Reserve characterised a recent slowdown in the US economy as transitory, not ruling out an interest rate hike this year. Spot gold was trading flat at $1,204.20 an ounce by 0640 GMT, after losing 0.6 percent on Wednesday. The metal had hit a three-week high in the run up to the Fed statement on expectations recent soft economic data would prompt the US central bank to delay any rate hike.
The Fed downgraded its view of the US labour market and economy after its two-day policy meet and said the poor performance was in part due to transitory factors. But the Fed's guidance differed little from its last meeting, and the central bank did not effectively rule out hiking rates at its next meeting. "The FOMC statement may have been interpreted as slightly hawkish by the gold markets," said HSBC analyst James Steel, referring to the Fed's policy-setting Federal Open Market Committee.