Gold erases early losses

Reuters

Singapore

Gold erased early losses to trade flat on Thursday, as the U.S. dollar slumped 2 percent against the yen after the Bank of Japan surprised markets by keeping monetary policy steady.

At a two-day rate review ending on Thursday, the BOJ decided to maintain its pledge to increase base money at an annual pace of 80 trillion yen ($732 billion). It also left unchanged a 0.1 percent negative interest rate it applies to some of the excess reserves that financial institutions park at the BOJ. The yen soared against the dollar and euro after the announcement, as investors unwound bets that the central bank would loosen monetary policy again. Spot gold had ticked up 0.1 percent to $1,247.40 an ounce by 0411 GMT, after dropping 0.7 percent earlier in the session.

Traders said the metal was tracking the dollar/yen move after a Federal Reserve statement on Wednesday that provided few clues on the U.S. central bank's monetary policy outlook.