Gold Rises 1 After Fed Stands Pat On Rates Curbs Hike Hopes

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By Karthika Suresh Namboothiri and Brijesh Patel

Dec 11 (Reuters) - Gold extended gains on Wednesday, rising nearly 1%, after the U.S.
Federal Reserve held interest rates steady and signaled borrowing costs are likely to remain unchanged indefinitely, sending the dollar and Treasury yields lower.

After cutting rates three times earlier this year, the Fed left its benchmark rate at the target range of between 1.50% and 1.75%, in a widely expected move.

Spot gold was up 0.7% at $1,474.62 per ounce as of 04:00 p.m.

ET (2100 GMT). U.S. gold futures settled 0.5% higher at $1,475.

"Gold is pushing to fresh highs above $1,475 per ounce as Jerome Powell sets a high hurdle to rate increases," said Tai Wong, head of base and precious metals derivatives trading at BMO.

"Gold approaches $1,480 pivot which had been a durable bottom of the $1,480-$1,520 range from Aug to Oct; a move back higher combined with a bond rally could renew bullish interest which has dissipated somewhat over the past month."

Fed Chair Powell said in order for the U.S.

central bank to move rates up, it would have to see a significant, persistent rise in inflation.

In the wake of Powell's comments, the dollar index slipped to a four-month low, while U.S. Treasury yields crept lower.

"If we continue to see dollar weakness for the rest of the year, we could see gold make a run back toward the $1,500 an ounce level," said Edward Moya, a senior market analyst at OANDA, in a note.

The European Central Bank is also expected to keep rates steady at a meeting on Thursday.

Also on investors' radar is the next round of U.S.

tariffs on Chinese imports, scheduled to take effect on Dec. 15.

Top economic and trade advisers from the White House are expected to meet in coming days with Trump, a source told Reuters, though a final decision has not been made.

Palladium rose 0.9% to $1,913.26 an ounce, having scaled a fresh peak of $1,917.30, on concerns that stagnating supply of the autocatalyst metal may fail to meet demand.

Adding fuel to supply concerns, prices zoomed past the key $1,900 level on Tuesday after mines across South Africa began shutting down due to power blackouts.

Platinum jumped 2% to $940.41 to a more than one-month high.

South Africa is a major producer of palladium and also has the biggest and most lucrative platinum reserves.

Meanwhile, spot silver rose 1.2% to $16.86 an ounce.

(Reporting by Karthika Suresh Namboothiri and Brijesh Patel in Bengaluru; Editing by Steve Orlofsky, Lisa Shumaker and Andrea Ricci)