Gold hits 9-month peak after Fed’s Powell remarks

Gold prices continued their gains today, Thursday, to record highest levels in more than nine months, after the Federal Reserve (the US central bank) raised interest rates by 25 basis points, as expected, and the market considered the comments of its president, Jerome Powell, as mitigation.

By 0401 GMT, spot gold rose 0.1 percent to $1951.79 an ounce, after hitting its highest level since April 2022 earlier in the session. US gold futures rose 1.3 percent to $1,967.40.

According to “Reuters”, the Federal Reserve raised the interest rate by a quarter of a percentage point on Wednesday, after large increases over the course of a year. However, Powell warned against further monetary tightening, noting at the same time that progress had been made in reducing inflation, which he said was in its early stages.

“Although Powell said that interest rate hikes may continue, the market expects the Federal Reserve not to be as aggressive anymore, which supports gold,” said Brian Lan, managing director at Gold Silver Central in Singapore.

He added, “From now on, dealers will focus on economic data and comments by Federal Reserve officials to get more indications.”

Gold tends to benefit from lower interest rates, because this reduces the opportunity cost of owning the yellow metal, which does not yield a return.

The dollar index fell 0.3 percent. The weakness of the US currency makes the bullion priced in it more attractive to buyers than holders of other currencies.

As for other precious metals, silver rose in spot transactions by 0.8 percent, to $ 24.17 an ounce, recording the highest level in a week.

Platinum rose 0.6 percent to $1,009.69, while palladium fell 0.2 percent, to $1,665.82.