Gold prices firm after US Fed settles for softer rate hike

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The central bank raised its benchmark interest rate by 50 basis points

Gold prices climbed more than 1% on Thursday after US Federal Reserve chair Jerome Powell ruled out large, aggressive interest rate hikes for the year as the central bank seeks to contain inflation without triggering an economic recession.

The Fed on Wednesday raised its benchmark overnight interest rate by a widely expected half-a-percentage point, the biggest hike in 22 years, as it seeks to tighten pandemic-era monetary policy. In a news conference after the release of the Fed’s policy statement, Powell explicitly ruled out raising rates by three-quarters of a percentage point at upcoming monetary policy meetings, driving US treasury yields and the dollar sharply lower, and supporting gold. The dollar was holding steady near a one-week low, making the greenback-priced gold more attractive for overseas buyers.

 

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