Gold rose more than 1% on Thursday as investors sought cover from soaring inflation, with bullion also extending gains after the U.S. Federal Reserve signalled a relatively less hawkish stance on interest rate hikes.

The Fed on Wednesday raised its benchmark overnight interest rate by 50 basis points, the biggest jump in 22 years, while Chair Powell added the bank was not considering 75-basis-point moves in the future.

Spot gold rose 0.6% to $1,892.34 per ounce by 10:04 a.m. ET (1404 GMT), having earlier hit its highest level since April 29. U.S. gold futures climbed 1.4% to $1,895.50.

"I don't think a whole lot changed in overall Fed policy from yesterday's meeting, but it just gave gold and silver traders an excuse to rally the market after the recent strong selling pressure," said Kitco senior analyst Jim Wycoff.

"The whole scenario in Europe with its energy supplies being constrained having banned some energy imports from Russia, that's leading to instability in the European marketplace, that's prompting safe haven demand for gold, prompting higher inflation in the eurozone," Wycoff added.

Gold's advance came despite gains in the dollar index, which typically hurts appeal for bullion among overseas buyers, and benchmark U.S. 10-year Treasury yields. But while gold is perceived as an inflation hedge, higher U.S. interest rates and bond yields lift the opportunity cost of holding zero-yield bullion.

"Bond yields will continue rising because of expectations that monetary policy from the Fed and other major central banks will be tightened further ... This is going to hold gold back from going too high in the medium term," said Fawad Razaqzada, market analyst at City Index.

Spot silver fell 0.5% to $22.85 per ounce, yet earlier reached $23.27, the highest in nearly a week. Platinum fell 1.3% to $978.56 while palladium fell 1.5% to $2,223.14.

(Reporting by Seher Dareen and Eileen Soreng in Bengaluru; Editing by Krishna Chandra Eluri)