Gold edged higher on Friday as the dollar hovered near its lowest in five months, under pressure from the Federal Reserve’s plan to make fewer interest rate hikes than expected last year.
* Spot gold rose 0.2 percent to $1,259.30 an ounce by 0038 GMT, while U.S. gold slid 0.4 percent to $1,260.40 an ounce. Spot gold close 0.4 percent lower in the last session.
* The yen stood within reach of a 17-month high against the dollar with the Federal Reserve’s cautious stance towards hiking interest rates continuing to take a toll on the U.S. currency.
* The U.S. central bank held interest rates steady and indicated it would tighten policy this year, but fresh projections showed policymakers expect two quarter-point increases by year-end, half the number forecast in December.
* Expectations the Fed would raise rates steadily this year had faded since the bank’s initial hike in December, as concerns over global growth roiled financial markets.
* Rising rates tend to pressure gold by lifting the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.
* The U.S. dollar index dropped to a five-month low on Thursday while shares on Wall Street rallied to lead global equities higher as a dovish U.S. Federal Reserve emboldened investors to take on more risk.