Gold scales late-April highs after dovish Fed

GOLD prices extended gains on Thursday (Feb 2) to touch their highest in more than nine months, after the US central bank raised interest rates by an expected 25 basis points and comments from chair Jerome Powell were read as dovish by the market.

Spot gold was up 0.1 per cent to US$1,952.29 per ounce, as of 0023 GMT, after hitting the highest level since April 2022 earlier in the session. US gold futures rose 1.4 per cent at US$1,969.40.

The Fed on Wednesday scaled back to a quarter-percentage-point rate increase after a year of larger hikes. Powell warned of further monetary policy tightening but also noted the progress on disinflation, which he said is in its early stages.

Gold tends to benefit in lower interest rate environment, as it reduces the opportunity cost of holding non-yielding bullion.

The Bank of England and the European Central Bank are expected to raise rates by 50 bps later in the day.

India raised total taxes on silver imports 15 per cent and on silver dore to 14.35 per cent, the government said in a statement on Wednesday, in an effort to align the duty structure of the metal with gold.

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Spot silver gained 0.5 per cent to US$24.09 per ounce, platinum rose 0.6 per cent to US$1,009.62 and palladium was flat at US$1,669.59. REUTERS