Gold steadied on Wednesday after falling to a two-week low earlier as the US Federal Reserve, in a widely expected move, raised interest rates by a quarter of a percentage point.
The reversal comes as bullion’s appeal was dimmed by hopes of progress in Russia-Ukraine talks. Earlier, Ukrainian President Volodymyr Zelensky said peace talks were sounding more realistic, even as Russia’s invasion continued.
Spot gold rose 0.5% to $1,926.96 an ounce by 5:08 p.m. ET. US gold futures stayed level at $1,927.00 an ounce on the Comex in New York.
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“Gold is holding well as the recent sharp pullback may have run its course. I expect gold prices to trade between $1,880-$1,960 range in the near-term,” Tai Wong, an independent metals trader in New York, told Reuters.
“However, the Fed was somewhat more hawkish in the dot plot than expected. They are projecting a hike at every meeting going forward in 2022. This does not bode well for gold market,” Wong added.
Meanwhile, the dollar index fell 0.5% against its rivals, making gold less expensive for other currency holders. Benchmark 10-year US Treasury yields also pulled back from recent highs, giving a boost to the non-yielding bullion.
(With files from Reuters)