Gold prices extended gains on Thursday
after comments from the US Federal Reserve chair Jerome Powell
on future interest rate hikes sounded less hawkish than feared,
dragging the dollar and Treasury yields lower.
Spot gold was up 0.2% at $1,737.44 per ounce, as of
0205 GMT, after rising 1% to a two-week high in the previous
session. US gold futures rose 1% to $1,736.70 per
The US central bank on Wednesday raised rates by
three-quarters of a percentage point for the second straight
meeting to combat soaring inflation.
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.
“Powell left the door slightly open to a review of the rate
situation and provided some sort of light at the end of the
tunnel that we’re not going to be seeing increasing rates going
into next year as well,” said Edward Meir, an analyst with ED&F
Man Capital Markets.
“That knocked the dollar and US yields down causing the
flurry we saw in gold. In the near-term, gold prices are
expected to move higher with good chance of testing resistance
between $1,780 to $1,800 over the next month.”
The dollar fell 0.6% overnight and was languishing
near a three-week low on Thursday, making greenback-denomated
gold less expensive for other currency holders.
Benchmark US Treasury yields fell to hover
near two-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% in the second quarter compared to the
same period in 2021, the World Gold Council said.
Elsewhere, spot silver gained 0.4% to $19.20 per
ounce, platinum rose 0.4% to $890, and palladium
climbed 0.6% to $2,042.51.
(Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu
Sahu and Uttaresh.V)