A watchman stands guard next to a decommissioned gold mine headgear near Johannesburg, South Africa, 26 February 2009. Gold Fields, South Africa's second-biggest gold producer, could cut up to 6,900 jobs, or 13 per cent of its 53,000 workforce, and possibly defer a R5,4 billion (Û470 million) project in order to meet a 10 per cent cut in power use imposed by the country's power utility Eskom, the company announced 25 February. South Africa is experiencing a crippling energy crisis due to its inability to supply enough electricity to satisfy its daily domestic and commercial requirements. EPA/JON HRUSA 
The metal jumped on Wednesday after the Fed said in a statement that it kept its benchmark U.S. rate unchanged and lowered the interest paid on reserves deposited with the central bank. Low rates are a boon to gold, which doesn’t pay interest.
Those gains evaporated minutes later, when Fed Chairman Jerome Powell said low inflation may be transitory, and that risks to the outlook appear to have “ moderated somewhat,” bolstering the dollar and sapping demand for the metal as a haven. Spot bullion erased gains, falling as much as 0.8 percent.
“What a tease,” Tai Wong, head of base and precious metals derivatives trading at BMO Capital Markets, said by email. “Powell’s comment that a drop in core inflation was ‘unexpected’ and ‘transitory,’ and risks abroad moderated, sends gold $7 lower, erasing the $4 gain.”
Gold for immediate delivery slipped 0.5 percent to settle at $1,276.76 an ounce on Wednesday. Prices have fallen for three straight months as a strong dollar, rising global equities and optimism over U.S.-China trade talks reduced the appeal of the metal as a haven.