Gold prices hovers near week-high after Fed Chair Powell's statement

economictimes.indiatimes.com:

Gold prices held near their highest levels in a week in early Asian trading on Thursday after the U.S. Federal Reserve delivered a widely expected interest rate hike and investors digested fairly balanced comments from Chair Jerome Powell.FUNDAMENTALS * Spot gold was up 0.2% at $1,975.05 per ounce by 0114 GMT, its highest since July 20. * U.S.

gold futures also gained 0.2% to $1,974.70. * The Fed raised interest rates by a quarter-of-a-percentage point on Wednesday, setting the benchmark overnight interest rate in the 5.25%-5.50% range, and highlighting that another 25 bps hike could be possibly at the September meeting based on a wide range of data. * Fed Chair Jerome Powell also flagged that the economy still needed to slow and the labour market to weaken for inflation to «credibly» return to the U.S.

central bank's 2% target, yet were no longer forecasting a U.S. recession. * Gold is highly sensitive to rising interest rates as they increase the opportunity cost of holding non-yielding bullion.

* The dollar and U.S. Treasury yields edged up after having fallen on Wednesday, limiting bullion's gains. * On the data front, the United States is expected to report that Q2's gross domestic product increased at a 1.8% annualised rate, while initial claims for unemployment benefits are expected to have increased 7,000 to a seasonally adjusted 235,000 for the week ended July 22.