Gold Climbs Following Fed's Decision to Hold Rates Steady

The gold market posted a modest rally after the Federal Reserve decided to leave interest rates unchanged in the 3.50-3.75% target range. The central bank maintained its tightening bias, even as three committee members voted for a 25-basis-point hike.

Spot gold initially surged $40 and last traded at $4,073.60 an ounce, up more than 1%. Markets had priced in roughly a 30% chance of a rate increase ahead of the meeting.

Under Chair Kevin Warsh, the Fed offered no forward guidance. It struck an optimistic note on U.S. economic expansion, strong productivity and investment, steady employment, and elevated inflation from supply shocks while reaffirming its 2% goal.