Gold prices rose on Thursday, as the dollar weakened after the US Federal Reserve kept the interest rate unchanged and reiterated its stance to keep benchmark rates near-zero through at least 2023.

FUNDAMENTALS

Spot gold rose 0.5% to $1,752.41 per ounce by 0119 GMT, while US gold futures rose 1.3% to $1,748.80 per ounce.

The US central bank said on Wednesday that the economy is on track for its fastest expansion in nearly 40 years, but its policymakers pledged to keep their foot on the gas despite an expected surge in inflation.

Lower interest rates reduce the opportunity cost of holding the non-yielding bullion and weigh on the dollar.

The dollar index dropped 0.5% to 91.405, making the greenback-denominated metal cheaper for non-US investors.

US Treasuries yields on the longer end of the curve remained elevated, while yields on shorter-term debt fell on Wednesday after the Federal Reserve's views.

Asian stocks were set for modest gains.

A Reuters poll showed two-thirds of Japanese businesses expect the Bank of Japan to limit long-term interest rate rises and keep them stable, ahead of the central bank's analysis this week.

Officials say the US will take an uncompromising stand in talks with China on Thursday in Alaska, in the first face-to-face meetings between senior officials from the two rivals since US President Joe Biden took office.

Silver rose 0.7% to $26.51, platinum was up 0.6% at $1,220.78 and palladium climbed 1.3% to $2,601.85