By Bharat Gautam

(Reuters) – Gold gained on Thursday following the U.S. Federal Reserve’s third interest rate increase in three years. The gains were supported by a decline in the dollar, and U.S. Treasury yields.

By 1023 GMT, the price of an ounce rose 0.8% to $1942.61 compared with a gain of about 1% in the previous session. U.S. lost 1.8% to $1.943.30

Although the U.S. central banking raised interest rates by 25bps on Wednesday, inflation concerns seem to be unaffected. The expected rise has kept gold’s appeal intact as an inflation hedge.

Ross Norman, an independent analyst, stated that gold is moving forward because of the negative news. It is counterintuitive to raise rates for gold at a negative rate, but it confirms that there’s an inflation problem.

In the United States, rising interest rates can increase your opportunity cost for holding low-yielding bullion.

While the Fed has laid out a bold plan to increase borrowing costs in the next year, both the yields and dollar are on the rise. It seems that investors have already priced in a higher rate of interest, which will boost gold. [USD/] [US/]

Brian Lan (managing director, dealer GoldSilver Central), said that the Fed’s “meeky” reaction to rising inflation has helped gold. Because.25% does not rock the boat, people will realize that gold is still worth holding.

Analysts believe that investors in safe haven gold will also continue to monitor the economic and political risks from Russia’s invasion Ukraine. It has already entered its fourth day.

Ross Norman explained that ETF flows were a good indicator of the bull run’s viability.

SPDR Gold Trust (P) held 0.8% more gold than the previous March 2021, reaching 1,070.53 tonnes Wednesday. [GOL/ETF]

Spot silver rose 1% to $25.31 an ounce while platinum rose 0.4% at $1,021.64. Palladium rose 2.6% to $2471.57