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The precious metal surged to its highest level in over nine months after the US Federal Reserve’s announcement to increase interest rates at a slower pace.
Spot gold was trading at $1,953.31 an ounce early Thursday, the highest since the bullion touched its peak on April 16, 2022, when it was selling for $1,986.97 an ounce.
In Dubai and the rest of the UAE, 24K gold was trading at AED 236.50 per gram ($64.39), up from its recent low of AED 196.20 last October 20. The price of 22K stood at AED 219 per gram, 21K at AED 212 and 18K at AED 181.75.
The Federal Open Market Committee (FOMC) announced late Wednesday that it had approved an interest-rate increase by 0.25%, as widely expected.
The latest adjustment is the lowest since the Fed Reserve took an aggressive policy stance last year to stem soaring inflation.
Gold’s recent gains have been supported by a weaker US dollar and expectations of a lower rate increase from the Fed Reserve.
“Although [Fed Reserve Chairman Jerome] Powell said rate hikes might continue, the market expects the Fed not to be drastic anymore, which is supporting gold,” Brian Lan, Managing Director at Singapore-based GoldSilver Central, was quoted by Reuters as saying.
Key commodities, which include oil and fuel products to gold, copper and grains, have had a strong start to the year, also due to China’s reopening.
In the month to January 24, gold alone had rallied by 6.2%, while net long in gold jumped 14% to 107,000 contracts, hitting a nine-month high, according to Ole Hansen, Head of Commodity Strategy at Saxo Bank.
(Reporting by Cleofe Maceda; editing by Seban Scaria)
