A day before Japan starts its Golden Week holidays, central bank governor Haruhiko Kuroda has handed a surprise present to bullion investors.Kuroda and his colleagues opted against a widely expected monetary stimulus on Thursday, boosting the yen, hurting the dollar and putting gold on course for its longest run of gains since February.
“The Bank of Japan shocked markets by not offering further intervention, which sent the yen higher and the dollar lower, benefiting gold,” said Simona Gambarini, a commodities economist at Capital Economics in London. Before the BoJ decision, prices had been down as much as 0.6%, with gold jumping more than $10 in the 20 minutes following its announcement. The Africa Gold Mining Index jumped 6.6%, the most since March 17, with AngloGold Ashanti, Gold Fields and Sibanye Gold up more than 5%. Gold has risen 18% this year, partly as central bankers in Japan and Europe deepened stimulus to try to kick start economic growth, and as investors scaled back expectations for US rate increases. The BoJ decision went against forecasts from a majority of economists surveyed by Bloomberg.
The Bloomberg Dollar Spot Index fell as much as 1%, the biggest drop since March 17, as the yen rallied.The US Federal Reserve on Wednesday left its benchmark rate unchanged for the third meeting since beginning tightening in December, and policy makers reiterated that increases will be gradual.