By Gina Lee

Investing.com – Gold was up on Thursday morning in Asia, with the dollar weakening after the announced that it would quicken its asset tapering and hike interest rates in its latest policy decision.

By 11:25PM ET (5:00 AM GMT), they were up 1.00% at $1,782.15 Normally, the inversely related to gold moved down Thursday.

After an initial drop of almost 1% and a subsequent two-month slump, the yellow metal rebounded after being hit with a sharp decline.

In its Wednesday policy meeting, the said that its asset tapering program will be accelerated to $30 billion per monthly. The interest rate was also kept at 25 percent. However, it projected three quarter-point increases to the interest rates in 2022 and 2023. Three more will be added in 2023. Two additional interest rate hikes are planned for 2024.

In the Fed’s new economic projections, the central bank expects inflation to run at 2.6% in 2022, compared with the 2.2% projected in September 2021.

“The market was looking for a hawkish move from the Fed and they got it in the dot plot,” precious metals trader Tai Wong told Reuters.

“The market is happy that the Fed is a little spooked and doesn’t want to be too far behind the curve. For gold, the key technical level is $1,750; a break substantially below that could lead to a rout in the waning days of the year.”

Investors also remain optimistic.

“The risk that the economy could fall into recession in 2023 does not seem so unreasonable. Gold’s weakness could be near its end as the Fed will be on autopilot until the March policy meeting,” OANDA senior market analyst Edward Moya told Reuters. 

The, the and the are other central banks that will be able to make their policy decisions.

Other precious metals: Silver rose 0.6% while platinum dropped 0.2% and palladium fell 1.3%.