Gold Edges Up From Six-Week Low as Markets Digest Fed Rate Hike

Gold prices moved higher on Thursday, recovering from a near six-week low touched in the previous session, as investors weighed the US Federal Reserve's latest interest-rate increase and its indication that further tightening could follow.

Spot gold gained 0.5% to trade at $4,283.45 per ounce in early Asian hours, after falling on Wednesday to its weakest level since August 7. US gold futures for December delivery, by contrast, slipped 1.5% to $4,321.80.

The Fed raised rates on Wednesday and flagged additional hikes in the months ahead. New central bank chief Kevin Warsh joined a unanimous decision, a move that effectively acknowledges the Trump administration's limited success so far in containing inflation that policymakers fear could deteriorate further.

Warsh pointed to a broad set of indicators, including labour-market data, in explaining his support for the increase. He noted that the economy had strengthened, a shift from his position at the Fed's July 28-29 meeting, when he had argued for holding rates steady.

Higher interest rates typically weigh on gold by making yield-bearing assets more attractive to investors.

Supporting the case for tighter policy, fresh data showed US retail sales rebounded sharply in August, with households increasing purchases across a range of goods and spending more at restaurants and bars. The figures underscored the economy's resilience even as consumers grow more uneasy about elevated inflation.

Attention also turned to the Bank of England, which was expected to leave interest rates unchanged on Thursday. Investors were watching for any signal that surging energy prices might push it to follow the Fed's lead.

In the Middle East, Saudi warplanes struck Yemen, according to the Houthis, as the Iran-backed group consolidated gains following a rapid advance that has expanded Tehran's regional reach and further disrupted global oil supplies.

Among other precious metals, spot silver rose 0.6% to $63.35, platinum added 0.8% to reach $1,765.65, and palladium climbed 1.4% to $1,286.95.

Later in the day, markets were due to receive final eurozone inflation figures for August, the Bank of England's September rate decision, and a batch of US data covering housing starts, weekly jobless claims and the Philadelphia Fed's business index.