Gold futures settled lower Wednesday, pressured by some gains in the U.S. dollar on the back of strong economic data, but prices rallied past $1,240 an ounce in electronic trading after the Federal Reserve lowered the number of interest-rate increases it expects this year.

The Federal Open Market Committee held interest rates steady, with the benchmark irate in a range of 0.25%-0.5%, and indicated it intends to lift them very slowly because of a weak global environment and volatile stock market. Officials penciled in only two quarter-point hikes this year, down from four such hikes in December.

The central bank made its highly anticipated policy statement at 2 p.m. Eastern Time, about 30 minutes after gold futures settled on Comex.

Ahead of the news, April gold fell $1.20 cents, or 0.1%, to settle at $1,229.80 an ounce–its lowest finish since Feb. 26.

Shortly after the Fed news, however, prices jumped to trade around $1,247.70.

Source : Market Watch