Gold prices rose on Thursday, remaining near the key $2,000 level due to expectations that the Federal Reserve will have limited room to increase interest rates further, which also led to a weaker dollar. While the Fed had increased interest rates as expected and pledged to control inflation, the shift in the Fed's language suggests that the central bank's final rate was in sight.
This has brought the dollar to a seven-week low against a basket of currencies, benefiting commodities priced in the dollar, and boosted the outlook for non-yielding assets like gold. Spot gold was up 0.3% to $1,974.58 an ounce, while gold futures rose 1.4% to $1,976.85 an ounce by 22:31 ET (02:31 GMT) on Wednesday.
The Fed's potential policy change comes amid a potential banking crisis that has resulted in several US banks collapsing due to a sharp rise in interest rates. As a result, investors turned to gold as a safe haven, with a less dovish Fed and slowing US economic growth furthering the case for the precious metal.
