Gold prices edged higher on Thursday supported by a softer dollar and weakness in the equities market, after the US Federal Reserve delivered a less-dovish outlook on monetary tightening than many had expected.
In a widely anticipated decision, the US central bank hiked interest rates by 25 basis points on Wednesday. But what took markets by surprise was the Fed's commitment to retain the core of its plan to tighten monetary policy, despite rising uncertainty about global economic growth.
Spot gold rose 0.5 percent to $1,249.46 per ounce at 0900 GMT, after declining the most since Nov. 27 in the previous session.
Prices crossed the 200-day moving average around $1,252 an ounce before the Fed's statement on Wednesday.
US gold futures declined 0.3 percent to $1,252.80 per ounce on Thursday.
“There is some safe-haven buying supporting gold prices today,” said Renisha Chainani, head of commodity and currency research at Monarch Networth Capital.
“Overall there is risk-off sentiment in the market.”