Gold prices gained in Asia on Friday with minutes from the Bank of Japan casting a shadow on easy monetary policies.
On the Comex division of the New York Mercantile Exchange, gold for April delivery rose 0.17% to $1,267.00 a troy ounce.
Silver futures for May delivery rose 0.4% to $16.055 a troy ounce, while copper futures for May delivery edged up 0.31% to $2.295 a pound.
The Bank of Japan board had a sharp debate on whether to follow some European central banks and add negative interest rates to its aggressive monetary easing program, leading to a tight 5 to 4 vote on adopting the new policy, the minutes of the bank's Jan. 28-29 meeting released Friday showed.
Overnight, gold built on gains from the previous day's surge on Thursday, as investors continued to react to a surprising move from the Federal Reserve to lower its interest rate forecast for the near-term future.
Gold rose considerably on Thursday, one day after the Federal Open Market Committee (FOMC) maintained the target range on its benchmark Federal Funds Rate at a level between 0.25 and 0.50%. The Fed concluded its two-day March meeting without adjusting rates, amid heightened global financial and economic risks and moderate firming of inflation. It marked the second consecutive meeting the FOMC left short-term rates unchanged, after the U.S. central bank ended a seven-year zero interest rate policy by raising rates 25 basis points in mid-December.
More importantly, the FOMC cut its rate outlook for the next 21 months lowering its 2016 forecast by 50 basis points to 0.88% and 50 basis points by the end of next year to 1.88%. Implicitly, the Fed's updated forecast suggests that the FOMC could raise rates only twice this year, down from previous estimates of four. On Thursday, the Federal Reserve Bank of New York held the Federal Funds Rate at 0.37%. The effective Fed Funds Rate traded in between 0.35 and 0.50%, as $67 billion in trades were exchanged.
Any rate hikes this year are viewed as bearish for gold, which struggles to compete with high-yield bearing assets in rising rate environments.
Also on Thursday, the labor market remained steady as new jobless claims ticked up by 7,000 to 265,000. At 268,000, the four-week average stayed relatively low.