Last Updated: May 04, 2023, 00:45 IST
The Fed raised interest rates by a quarter percentage point to quell the inflationary pressures that have kept price rises well above its 2% target.(Representative image)
Spot gold was 0.3% higher at $2,022.19 per ounce by 2:19 p.m. EDT (1819 GMT) after touching its highest since April 14 at $2,036.15 earlier
Gold firmed on Wednesday after a brief jump to nearly 1% as the U.S. Federal Reserve delivered a widely expected rate hike and signalled a pause in further increases.
Spot gold was 0.3% higher at $2,022.19 per ounce by 2:19 p.m. EDT (1819 GMT) after touching its highest since April 14 at $2,036.15 earlier.
U.S. gold futures rose 0.4% to $2,031.60.
The Fed raised interest rates by a quarter percentage point to quell the inflationary pressures that have kept price rises well above its 2% target.
It also signalled a pause in further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political standoff over the U.S. debt ceiling, and monitor the course of inflation.
“Gold snapped to the day’s highs on reflex after the Fed statement indicated a pause but that was largely expected and bullion has now retraced, waiting for (Fed Chair Jerome) Powell,” said Tai Wong, an independent metals trader based in New York.
After the Fed’s decision, the U.S. dollar index fell 0.6%, making bullion more expensive for buyers holding other currencies, while benchmark 10-year Treasury yields also lowered. [USD/] [US/]
U.S. interest rate futures priced in a pause in Fed’s tightening at the June and July policy meetings, according to the CME’s FedWatch tool.
Non-yielding bullion, a customary safe haven against inflation and economic uncertainty, draws lower demand when higher interest rates boost returns on competing assets with yields.
Traders now looked to Powell’s press conference at 2:30 p.m. EDT for more cues.
“Concerns regarding U.S. regional banks and the debt ceiling suggest further price volatility is in the offing,” said Standard Chartered analyst Suki Cooper.
Gold prices had gained 1% in April as the U.S. banking crisis spurred a flight to safety.
Silver were nearly flat at $25.39 per ounce, platinum shed 1.2% to $1,052.34, while palladium dropped 0.2% to $1,426.97.
Read all the Latest Business News, Tax News and Stock Market Updates here
(This story has not been edited by News18 staff and is published from a syndicated news agency feed)
Discover more from Divya Bharat 🇮🇳
Subscribe to get the latest posts sent to your email.