NEW YORK — Gold prices bounded higher Wednesday as the Federal Reserve reaffirmed its pledge to keep interest rates low for the foreseeable future.
Gold for February delivery rose $13.20 to $1,136.20 an ounce on the New York Mercantile Exchange.
As widely expected, the Fed kept its benchmark interest rate at a level near zero, where it's been all year, in an effort to spur lending and further support the economic recovery.
The ultra-low rates have been a drag on the dollar since March, encouraging investors to sell the greenback and buy assets like stocks and commodities that can earn bigger returns. Gold has been one of the biggest beneficiaries of the drop in the dollar because of its use as a hedge against a weak currency as well as inflation.
Gold had been rallying prior to the central bank's statement on the economy, which came at the conclusion of a two-day policy meeting, as the dollar weakened. Immediately following the statement, the dollar briefly popped and gold prices pared their gains in after-hours trading on the Nymex. But the months-long trend of a weaker dollar and higher gold soon resumed.
On the Chicago Board of Trade, March wheat futures inched up half a cent to $5.3725 a bushel, while corn for March delivery added 2.75 cents to $4.1025 a bushel.
March soybeans rose 5 cents to $10.67 a bushel.
Other soft commodities, including cotton, sugar, coffee and cocoa, rose.
