Gold rises after Fed points to slower pace of rate hikes

Published 23 Hours AgoUpdated5 Hours AgoReuters Getty Images

Gold prices rose on Wednesday after the Federal Reserve kept benchmark interest rates unchanged and hinted at a slower pace of monetary policy tightening.

Gold futures for February delivery traded 0.75 percent higher at 1,318.70 per ounce. Spot gold was up 0.47 percent at $1,318.01.

The Fed's decision was widely expected by investors. In a statement, the central bank voted unanimously hold hold its policy rate in a range between 2.25 percent and 2.5 percent. The Fed added: "In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes."

Underscoring investor interest in gold, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 1 percent to 823.87 tonnes on Tuesday, their highest since June.

SPDR gold holdings have climbed 4.6 percent so far this month, the biggest monthly gain since September 2017.

Gold had traded around the flatline heading into the Fed announcement. Gains were kept in check after payrolls processor ADP reported that the U.S. private sector added 213,000 jobs in January, beating forecasts for 178,000 new jobs. The dollar held modest gains after the report.

"Better than expected ADP data is pressuring gold. But the metal is still hanging on despite that," said Bob Haberkorn, senior market strategist at RJO Futures.