Gold reverses higher after Fed policy decisions

Gold prices rose on Wednesday as the dollar lost ground against most major rivals following the Federal Reserve's rate decisions. 

The Fed Carries on its Path

The Fed announced a 0.25% hike in interest rates to below 5%.

It's the ninth rate hike in a row since the starting the current cycle of policy tightening in March 2022

The Federal Reserve asserted the US banking system remains strong and sound, and that recent developments will likely lead to stricter crediting criteria for individuals and corporations, which might impact growth and inflation. 

The Federal Open Market Committee will continue to monitor data and the impact of the monetary policy, with the aim of bringing inflation back to the 2% target.

The Fed cut its growth forecasts for the this year and the next, while expecting one more rate hike this year.

The Fed expects the US GDP to grow by 0.4% this year, down from 0.5% in previous forecasts, while cutting 2024 growth forecasts from 1.6% to 1.2%, but raised 2025 forecasts from 1.8% to 1.9%.

The Fed also cut unemployment forecasts for this year from 4.6% to 4.5%, but maintained 2024 forecast at 4.6%.

And finally, the Fed held its forecasts for interest rates this year at 5.1%, pointing to one more rate hike this year.

The Dollar

Following the press statement and its somewhat unclear predictions, the index tumbled 0.8% as of 19:42 GMT to 102.4, with a session-high at 103.2, and a low at 102.07.

Spot gold prices rose 1.5%, or $29.4 to $1,970.50 an ounce.