FX.co ★ Gold Pares Gains After Fed

Gold prices pared early gains and were little changed around $4,300 an ounce on Wednesday as traders assessed the Federal Reserve’s latest policy decision. The Fed raised the federal funds rate by 25 basis points, as widely anticipated, and signaled at least one additional hike this year to tackle persistently high inflation.

Elsewhere, the Bank of England is expected to keep borrowing costs unchanged on Thursday, while the Bank of Japan is poised to raise rates on Friday. Last week, the European Central Bank increased borrowing costs for the second time this year.

Oil prices retreated today, but the situation in the Middle East remains fragile, sustaining elevated supply risks. The ongoing energy shock is likely to add further upward pressure on inflation and could lead to additional monetary tightening by central banks.