Dubai, UAE — Gold prices climbed on Wednesday after the US Fed toned down its aggressive approach to reining in inflation.
Spot gold was up 1.7 percent at $1,973.52 per ounce by 3:56 p.m. EDT (1956 GMT), after advancing as much as 2 percent. US gold futures settled 0.4 percent higher at $1,949.60 before the Fed announcement, Reuters reported.
The Fed raised interest rates by a quarter of a percentage point, but indicated it was on the verge of pausing further increases in borrowing costs amid recent turmoil in financial markets.
Silver rates also rose to their 7-week high.
US dollar hit 7-week low on US Fed rate hike, a reason for rising Gold prices.
The lingering credit concerns are expected to support gold prices in the near term, making it safe haven amid global economic woes. Investors have been turning to gold and Treasurys after the collapse of Silicon Valley Bank and Credit Suisse’s struggles.Gold prices are expected to have more room to rise and could go as high as $2,600 per ounce.
Already, Fitch Solutions have predicted that gold would reach a high of $2,075 “in the coming weeks,” basing its outlook on “global financial instability.” It added that it expects gold to “remain elevated in the coming years compared to pre-Covid levels.”