Gold prices continued to rise Thursday, hitting a high in more than nine months after the Federal Reserve raised interest rates by an expected 25 basis points and comments from Chairman Jerome Powell were seen as dovish by the market.
Spot gold rose 0.2% to $1953.76 an ounce as of 02:06 GMT after reaching its highest level since April 2022 earlier in the session. U.S. gold futures
rose 1.3 percent to $1967.50.
The Fed raised rates by a quarter of a percentage point Wednesday after a year of more significant hikes. Still, Powell warned of further monetary tightening, noting progress on inflation, which he said was in the early stages.”Although Powell said that rate hikes could continue, the market expects the Fed to no longer act drastically, which supports gold. However, we will soon see some profit taking, with the metal still facing resistance at the $1,960 level,” said Brian Lan, managing director of Singapore-based dealer GoldSilver Central.
“Going forward, traders will be guided by economic data and comments from Fed officials.”
Gold tends to benefit from lower interest rates because it reduces the opportunity cost of holding unprofitable bullion.
If there are new signs of a slowing U.S. economy and the Fed continues to cut rates, investor demand for gold will rise, said Cesar Bryan, a Gabelli Gold Fund portfolio manager.
