(Bloomberg) -- Gold rose for a second day after the Federal Reserve signaled that it may slow the pace of interest rate increases, a move that hurt the dollar and pushed Treasury yields lower.
Bullion traded near a two-week high after gaining 1% on Wednesday, when the Fed raised rates by 75 basis points. Chair Jerome Powell said while a similar move was possible again, the pace of hikes will slow at some point. Ahead of gross domestic product data on Thursday, he rejected speculation the US is in recession.
Despite the post-FOMC meeting rally, the traditional haven is still heading for a fourth straight monthly loss as recent dollar strength and rising interest rates have combined to dim the precious metal’s appeal. Holdings in bullion-backed exchange-traded funds are headed for the biggest monthly drawdown since March 2021.
The Federal Open Market Committee “is strongly committed to returning inflation to its 2% objective,” it said in a statement, repeating language that it’s “highly attentive to inflation risks.” Powell said officials would set policy on a meeting-by-meeting basis rather than offer explicit guidance on the size of the next move.
Spot gold added 0.2% to $1,737.12 an ounce at 8:31 a.m. in Singapore, after closing on Wednesday at the highest since July 13. The Bloomberg Dollar Spot Index was flat after losing 0.6% in the previous session. Silver and platinum rose, while palladium steadied.