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Gold price rises as Fed’s Powell allays fears over large rate hikes

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By Brijesh Patel

(Reuters) – Gold prices rose to a more than two-week high on Thursday after U.S. Federal Reserve Chair Jerome Powell’s comments indicated a less aggressive Fed rate-hike trajectory, dragging the dollar lower.

Spot gold was up 0.6% at $1,743.49 per ounce, as of 0711 GMT, its highest since July 13.

U.S. gold futures rose 1.1% to $1,737.40.

The U.S. central bank on Wednesday raised rates by three-quarters of a percentage point for a 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.

“In the near-term, gold prices are expected to move higher with a 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 against its rivals, making greenback-denominated gold less expensive for other currency holders. [USD/]

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.

Spot silver gained 1.1% to $19.34 per ounce, platinum rose 0.9% to $894.14, and palladium climbed 2.3% to $2,077.79.


(Reporting by Brijesh Patel in Bengaluru; Editing by Uttaresh.V, Sherry Jacob-Phillips and Vinay Dwivedi)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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