Gold Firms After Rate Hike Fed Signal on Pause in Increases

(May 4 2023- Rohit)

Gold firmed on Wednesday after a brief jump to nearly 1% as the U.S. Federal Reserve delivered a widely expected rate hike and signalled a pause in further increases.

Spot gold was 0.3% higher at $2,022.19 per ounce by 2:19 p.m. EDT (1819 GMT) after touching its highest since April 14 at $2,036.15 earlier.

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U.S. gold futures rose 0.4% to $2,031.60.

The Fed raised interest rates by a quarter percentage point to quell the inflationary pressures that have kept price rises well above its 2% target.

It also signalled a pause in further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political standoff over the U.S. debt ceiling, and monitor the course of inflation.

“Gold snapped to the day’s highs on reflex after the Fed statement indicated a pause but that was largely expected and bullion has now retraced, waiting for (Fed Chair Jerome) Powell,” said Tai Wong, an independent metals trader based in New York.