Gold Breaches US$4,100 as Fed Holds Rates
Gold prices strengthened after the Federal Reserve decided to maintain its benchmark interest rate. The precious metal rose by up to 0.8% and briefly touched the US$4,100 per troy ounce level, following a 0.9% gain during Wednesday's trading.
The Fed's decision to hold rates was reached via a 9-to-3 vote. However, the fact that three officials supported a rate hike indicates that some policymakers are beginning to see the need for higher borrowing costs to curb inflation risks.
Fed official Kevin Warsh emphasized that the decision to hold rates does not mean the central bank is indifferent to inflation. He stated that if inflation remains high over the projected period, interest rates could still be part of the policy solution.
Gold remains down more than one-fifth since the US-Iran conflict began over five months ago. Pressure has stemmed from high energy prices, inflation concerns, and expectations of higher interest rates for a longer period. Nevertheless, gold has managed to hold near the key support level of US$4,000 since late June, supported by buying activity on price dips.
In terms of market impact, the Fed's decision to hold rates provided room for a gold rebound, particularly as the US dollar weakened. Spot gold rose 0.6% to US$4,091.40 per troy ounce, while silver surged 1.1% to US$58.37. However, the US$4,200 level represents the next key area. If gold can break through that level, the potential for further gains opens up, though Middle East conflict and inflation risks could keep XAU/USD movements volatile. (asd)*
Source: Newsmaker.id
