Gold prices extended gains on Wednesday, helped by a weaker dollar and bond yields after the U.S. Federal Reserve delivered a widely expected interest-rate hike and investors digested comments from Chair Jerome Powell. U.S. gold futures settled 0.5% higher at $1,974.90.
The Fed raised interest rates by a quarter of a percentage point on Wednesday, marking the 11th hike in the U.S. central bank's past 12 policy meetings, and the accompanying policy statement left the door open to another increase.
Powell said "it's not an environment where we want to provide a lot of forward guidance" about future rate actions, and whether the Fed hikes again will be determined by where the data stands at the time of future policy gatherings.
Rising interest rates increase the opportunity cost of holding non-yielding bullion.
"The general consensus is that the Fed is getting closer to the end of its interest rate hike cycle. As a result, there is an expectation that yields will slowly come down, and that is, generally a supportive environment for gold," said David Meger, director of metals trading at High Ridge Futures.
The dollar index fell 0.4% against its rivals after the Fed statement, making gold less expensive for other currency holders. U.S. 10-year Treasury yields slipped to 3.862%.
Focus now shifts to policy decisions from the European Central Bank and Bank of Japan due this week.
"Bulls remain nominally in control of the gold narrative but they need to drive prices back above $1,988 per ounce recent highs to maintain momentum," said Tai Wong, a New York-based independent metals trader.
Elsewhere, silver gained 1% to $24.96922 per ounce, platinum was steady at $966.0611, while palladium lost 1.6% to $1,262.16639.