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Fed hikes rates by 25 basis points
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Gold might rise into range of $1,992-$2,009/oz -
technicals
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U.S. dollar down 0.3%
(Adds graphic and details, updates prices)
By Kavya Guduru
March 23 (Reuters) - Gold prices advanced on Thursday,
as the dollar slipped after the U.S. Federal Reserve hinted it
was nearing a pause in its rate-hike cycle, making the
safe-haven asset a more attractive bet.
Spot gold was up 0.5% at $1,978.93 per ounce, as of
0703 GMT. U.S. gold futures gained 1.6% to $1,981.40.
Traditionally considered a hedge against inflation and
economic uncertainties, gold jumped 2% on Wednesday after the
Fed raised interest rates by an expected 25 basis points, and
indicated it might pause further increases after the recent
collapse of two U.S. banks.
The dollar fell 0.3%, making bullion cheaper for
overseas buyers.
But "much of what we heard from (Fed) Chair (Jerome) Powell really was focused on the Fed being in inflation-fighting mode.... he made very clear that rate cuts are not on their horizon this year," said Ilya Spivak, head of global macro at Tastylive. Fed policymakers pointed to just one more rate hike this year, but less easing next year than most thought would be appropriate just three months ago.
Powell in his press conference cautioned that the Fed would do "enough" to bring inflation down to 2%, and raise rates higher if it needed to. "The devil was in the language details and Powell's presser," said Nicky Shiels, head of metals strategy at MKS PAMP SA.
"With more financial and economic uncertainty and less Fed hikes, sidelined precious metals investors will reengage." Gold prices have risen more than 8% so far this month on concerns surrounding the banking and financial industry.
U.S. Treasury Secretary Janet Yellen told lawmakers on
Wednesday that she had not considered or discussed "blanket
insurance" to U.S. banking deposits without approval by
Congress.
Gold might rise into a range of $1,992-$2,009 per ounce, as
it has recovered strongly from Wednesday's low of $1,934.19,
Reuters technical analyst Wang Tao said.
Spot silver slipped 0.3% to $22.96 per ounce,
platinum added 0.9% at $986.45, and palladium lost
0.3% to $1,446.05.
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Gold's allure rising ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Kavya Guduru in Bengaluru; Editing by Nivedita
Bhattacharjee and Subhranshu Sahu)
