Gold prices rose as the Federal Reserve took a less hawkish tone than expected, leaving interest rates unchanged amid speculation that Japanese authorities intervened to support the yen, hurting the dollar.
Gold rose to around $2,330 an ounce in early Asian trade after closing up 1.5% in the previous session, its biggest one-day gain since mid-April. Treasury yields fell on Wednesday, helping bullion rally, as Federal Reserve Chairman Jerome Powell played down the likelihood of a rate hike, though he reiterated that more evidence of easing inflation was needed before lowering borrowing costs.
Japanese authorities intervene
In global currency markets, the yen advanced more than 3% against the dollar, sparking speculation that Japanese authorities intervened for the second time this week to support the currency. The US currency index fell, making the precious metal more attractive to most buyers.
Gold has risen about 13% this year, hitting a record high last month, even as the Federal Reserve’s timetable for rate cuts was pushed back. The rally over the past two months has been driven by aggressive central bank buying, demand from Asian markets — especially China — and conflicts in Ukraine and the Middle East.
Spot gold was up 0.3% at $2,326.03 an ounce at 9:07 a.m. in Singapore, while silver was up about $27 an ounce. The Bloomberg Dollar Spot Index was down 0.3%.
Meanwhile, palladium lagged platinum, after its price fell below its sister metal yesterday for the first time since February, with its long-term premiums eroded by the pessimistic outlook for demand for gasoline-powered cars.
