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Gold fell from one-month highs on Friday after Federal Reserve chair Janet Yellen kept the door open to an increase in USA interest rates this year, sparking a dollar rally, while palladium was on track for its biggest weekly rise in nearly four years.

“Asset classes like gold are still expensive and they are fundamentally likely to suffer if US rates go up, if the dollar remain strong“, Manpreet Gill, head of fixed income, currency and commodities investment strategy at Standard Chartered Plc, said in an interview...

That dilemma was compounded by “the (domestic) combination of sharply slowing growth and rising inflation“, bank Governor Lesetja Kganyago told a news conference after it cut its 2015 economic growth forecast to 1.5 percent from 2.0 percent.

The US Federal Reserve’s decision to keep rates on hold last week didn’t come as a surprise to CMC Markets trader Sheldon Slabbert.

In the us , interest rates have never been lower for longer (for almost seven years) but delay in raising rates also carries increasing risk.

However, the central bank maintained its bias towards a rate hike sometime this year, while lowering its long-term outlook for the economy.

After a week of build-up, debate and second-guessing, the US Federal Reserve chose to keep interest rates on hold.

“We may continue to see a downward progression for stock markets, as investors adjust to a world where growth is expected to be weaker…”

“Leaving United States interest rates at rock bottom could mark a turning point for the relative performance of emerging and developed markets”, said analyst Jasper Lawler at CMC Markets UK.

Mike van Dulken, head of research at Accendo Markets, said investors are feeling uneasy after the Fed highlighted “concerns about external factors such as China, market volatility and deflation derailing a [U.S.] recovery”.

Over the next month the market’s “fixation is going to shift” away from Fed lift-off talk, he says, and toward figuring out how the US and global economy is doing and what the outlook is for third-quarter corporate earnings.

US Federal Reserve decided not to immediately hike interest rates, surprising many who had expected to see rate moving up in the world’s top economy after several years.

But, she said, “we have some concerns about negative impacts from global developments and some tightening of financial conditions”.

On Friday the rupee appreciated to a one-month high and bond yields fell to an over three-month low after the US Fed decided to keep interest rates unchanged in its meeting.

The buck had traded in a narrow range against most of its rivals during the past week as investors waited for the Fed’s decision, even as many expected the central bank to hold off Thursday, said Mark McCormick, global FX strategist based in New York. However, following the...