Gold extended gains on Thursday to its highest level in nearly two weeks as the dollar tumbled after the Federal Reserve signaled a slower pace of U.S. interest rate hike and caution on U.S. economic growth.
The Fed on Wednesday moved a step closer to hiking rates for the first time since 2006, but downgraded its economic growth and inflation projections, signalling it is in no rush to push borrowing costs to more normal levels.
The dollar has gained nearly 8 percent this year against a basket of major currencies as strong U.S. economic data boosted expectations the Fed would soon start raising interest rates. Diverging global monetary policies have also helped.
Gold, on the other hand, fell to a four-month low earlier this week as fears mounted regarding higher interest rates. The Fed's caution brought some bullion investors back on board.
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