Gold Rebounds as Dollar Eases, but Hawkish Fed Outlook Caps Gains

Gold prices rebounded on Thursday after the US Dollar's recent surge, but the metal's gains were capped by the Federal Reserve's hawkish outlook.

The Fed delivered its first interest rate hike since 2023 on Wednesday, lifting the federal funds target range by 25 basis points to 3.75%-4.00%. The updated dot plot showed that 16 of 18 policymakers expect at least one more quarter-point increase by the end of the year, with a median projection pointing to a policy rate of 4.1%.

US Treasury yields remained below their recent highs, lending support to gold, but the precious metal's recovery was limited by higher interest rates, which typically weigh on non-yielding assets like gold.