Gold tops $1,300

Reuters

Bengaluru

Gold topped the $1,300 level for the first time since early May on Thursday, after the U.S. Federal Reserve indicated it could be less aggressive in tightening monetary policy next year.

The Fed kept interest rates unchanged on Wednesday and signalled it still planned to raise rates twice in 2016, though it said slower economic growth would crimp the pace of monetary policy tightening in future years.  Gold is sensitive to interest rate hikes, which increase the opportunity cost of holding the non-interest yielding metal.

Spot gold was up 0.7 percent at $1,300.20 an ounce as of 0401 GMT, after touching a peak of $1,301.40, its highest since May 3, earlier in the session. 

U.S. gold climbed 1.2 percent to $1,303.40. The bullish impact of the FOMC´s decision to leave rates unchanged and the tone of the statement are near-term gold bullish, HSBC analyst James Steel said in a note.