Gold prices held steady on Thursday, hovering near two-week highs hit in the previous session on a weaker dollar after the US Federal Reserve disappointed investors, who were expecting more hawkish comments on interest rate rises. The Fed raised interest rates on Wednesday and forecast at least two more hikes in 2018, contrary to three more increases most market watchers expected.
In its first policy meeting under new Fed chief Jerome Powell, the US central bank indicated that inflation should finally move higher after years below its 2 percent target and that the economy had recently gained momentum. "The FOMC statement was more dovish than we thought warranted ... At some stage, the Fed will have to grasp the nettle, but the danger is that in doing so, it will bring forward a credit crunch," said Alasdair Macleod, head of research with Toronto-based Goldmoney Inc.
"These are good conditions for gold, because we can expect the dollar to weaken." Spot gold rose 0.1 percent to $1,332.77 per ounce at 0739 GMT. Prices rose to a two-week high of $1,336.59 of Wednesday, and also registered their biggest single-day percentage gain since May 17, 2017. US gold futures for April delivery rose 0.7 percent to $1,331.10 per ounce.
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