New York, June 29: Gold prices surged on Wednesday as the Federal Reserve left interest rates untouched but warned of inflation dangers ahead in the US economy.In other featured markets, crop-enhancing rains continued to pummel corn, while coffee futures edged lower as selling to cut losses overwhelmed buying interest.At the New York Board of Trade, gold futures were boosted by the central bank's decision not to tinker with US interest rates.
But the bank put the nation on alert against inflation, signalling it may resume raising rates in the months ahead. Investors traditionally seek refuge in gold as a hedge against inflation.
Also supporting bullion was US data showing durable goods orders jumped 6 per cent in May, driven by strong demand for electronic and electrical goods. Carlos Perez-Santalla of Hudson River Futures said gold seemed to have reaped a sudden inflation-hedge benefit from the combination of unchanged interest rates and a signal that the galloping US economy has not been reined in despite six interest rate increases since last July.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.