Gold rises as dollar, yields slip after Fed hike, Powell comments
Gold prices extended gains on Thursday (Jul 28), as the US dollar and Treasury yields fell after the Federal Reserve raised interest rates by 75 basis points as expected and its chairman sounded less hawkish on future hikes.
Spot gold was up 0.2 per cent at US$1,736.89 per ounce, as of 1.04 am GMT, after rising 1 per cent to a 2-week high in the previous session.
US gold futures rose 0.9 per cent to US$1,734.80 per ounce.
The US central bank on Wednesday raised rates by 3-quarters of a percentage point for the second straight meeting to combat soaring inflation.
Fed chair Jerome Powell said another "unusually large" increase in interest rates may be appropriate at the September meeting, but the decision will be determined by the incoming economic data and it would not give forward guidance.
The dollar fell 0.6 per cent overnight after comments from Powell spurred hopes for a slower hiking path. A weaker dollar makes greenback-denominated gold less expensive for other currency holders.
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Benchmark US Treasury yields fell to hover near 2-month lows. Lower bond yields reduce the opportunity cost of holding non-interest bearing gold.
Meanwhile, a sharp fall in purchases by investors pulled global gold demand down 8 per cent in the second quarter compared to the same period in 2021, the World Gold Council said.
Asian shares made cautious gains on Thursday as investors scented a possible slowdown in the pace of US rate hikes.
Spot silver eased 0.2 per cent to US$19.09 per ounce, platinum gained 0.2 per cent to US$888.12, and palladium was steady at US$2,029.51. REUTERS
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