Gold rose more than 1 percent from a three-week low on Wednesday after the US Federal Reserve increased interest rates and forecast at least two more hikes for 2018, falling short of the three more increases many expected. The US dollar also hit its session low after the Fed decision. In its first policy meeting under new Fed chief Jerome Powell, the US central bank said inflation should move higher amid a stronger economy after years below its 2 percent target.
"The economic outlook has strengthened in recent months," the Fed said in a statement at the end of a two-day meeting in which it lifted its benchmark overnight lending rate by a quarter of a percentage point to a range of 1.50 percent to 1.75 percent. Inflation "is expected to move up in coming months and stabilize" around the Fed's target, it said.
Spot gold rose 1.8 percent at $1,334.75 per ounce by 3:34 p.m. EST (1934 GMT), earlier hitting $1,335.47, its highest since March 7. Bullion had dropped as low as $1,306.91 in the previous session. US gold futures for April delivery settled up $9.60, or 0.7 percent, at $1,321.50 per ounce. Among other precious metals, silver added 2.8 percent at $16.63 an ounce, surpassing a six-day high. Platinum increased 1.9 percent at $958.40 per ounce and palladium rose 1.5 percent at $993 per ounce.
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