Gold Hovers Around One Week High

Published on May 05, 2022 13:15

COMEX Gold is consolidating around one week high after a very sharp uptick from three month low. However, the highs around $1900 per ounce are capping the upside now. The US dollar eased overnight after the Fed sounded less hawkish on larger rate hikes going forward although it raised benchmark interest rates by 50 bps in yesterday`s FOMC, the largest since 2000 as policymakers urgently tried to tamp down inflation. The Federal Reserve on Wednesday announced its widely expected decision to raise interest rates by half a percentage point. The Fed announced that it has decided to raise the target range for the federal funds rate by 50 basis points to 0.75 to 1.0 percent and said it anticipates that ongoing increases in the target range will be appropriate. The central bank also outlined a program whereby it will eventually cut its bond holdings by $95 billion a month. However, the US Fed Chair Jerome Powell emphasized the commitment to bringing inflation down, though he said a 75 basis points hike is �not something the committee is actively considering.� The dollar index, that measures the greenback against a basket of currencies saw a sharp slide from 5- year high levels and kept Gold supported. The commodity currently trades up 1.4% at $1895 per ounce.