COMEX gold futures were trading at $4,085.80 per ounce, up $49.50 or 1.23%, after touching an intraday high of $4,097.70 an ounce. COMEX silver futures rose 1.10% to $58.730 per ounce, after hitting a session high of $58.890 an ounce.
The gains came after the Federal Reserve left its benchmark interest rate unchanged at its latest policy meeting. Fed Chair Kevin Warsh reiterated the central bank’s commitment to bringing inflation under control, but stopped short of offering clear guidance on the timing of the next policy move.
Following the policy announcement, traders pared expectations of a September rate increase. According to CME Group’s FedWatch Tool, markets are now pricing in a 57% probability of a rate hike in September, down from around 81% before the Fed’s statement.
Investors are now awaiting the release of the US Personal Consumption Expenditures (PCE) Price Index for June, the Federal Reserve’s preferred measure of inflation. The data is expected to provide fresh clues on the direction of US interest rates.
Higher interest rates typically reduce the appeal of non-yielding assets such as gold by increasing the opportunity cost of holding them. Conversely, expectations of lower or stable rates tend to support precious metal prices.
Geopolitical risks also remained in focus. Reports of an attack on a US-owned gas storage tanker at Egypt’s Mediterranean port of Damietta and renewed tensions between the US and Iran kept safe-haven demand for precious metals intact.Markets will also monitor monetary policy decisions from the Bank of England and the Bank of Japan later this week, with both central banks widely expected to keep interest rates unchanged while maintaining a cautious stance on inflation.
-With Reuters inputs
