Last update: 04 May 2023, 00:45 IST
The Fed raised interest rates by a quarter of a percentage point to ease inflationary pressures that have kept price inflation well above its 2% target. (Representative image)
Spot gold was up 0.3% at $2,022.19 an ounce as of 2:19 p.m. EDT (6:19 p.m. GMT) after hitting its highest since April 14 at $2,036.15 more early
Gold strengthened on Wednesday after a brief jump to nearly 1% as the U.S. Federal Reserve announced a widely expected rate hike and signaled a pause in further hikes.
Spot gold was up 0.3% at $2,022.19 an ounce as of 2:19 p.m. EDT (6:19 p.m. GMT) after hitting its highest level since April 14 at $2,036.15 earlier.
US gold futures rose 0.4% to $2,031.60.
The Fed raised interest rates by a quarter of a percentage point to ease inflationary pressures that have kept price inflation well above its 2% target.
It also signaled a pause in further increases, giving officials time to assess the fallout from recent bank failures, await the resolution of a political standoff over the US debt ceiling, and monitor developments in inflation.
“Gold hit the day’s highs on reflex after the Fed statement signaled a pause, but that was widely expected and bullion has now pulled back, pending (Fed Chairman Jerome) Powell,” said Tai Wong, an independent New York-based metals trader.
After the Fed’s decision, the US dollar index fell 0.6%, making bullion more expensive for buyers holding other currencies, while benchmark 10-year Treasury yields also fell. decrease. [USD/] [US/]
U.S. interest rate futures priced in a pause in Fed tightening at policy meetings in June and July, according to the CME’s FedWatch tool.
Yieldless bullion, a usual refuge from inflation and economic uncertainty, attracts weaker demand when higher interest rates increase the yields of competing assets with yields.
Traders have now turned to Powell’s press conference at 2:30 p.m. EDT for more clues.
“Worries about US regional banks and the debt ceiling suggest further price volatility,” said Standard Chartered analyst Suki Cooper.
Gold prices had gained 1% in April as the US banking crisis spurred a flight to safety.
Silver was nearly flat at $25.39 an ounce, platinum lost 1.2% to $1,052.34, while palladium fell 0.2% to $1,426.97.
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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)
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