LONDON: Gold rose on Thursday after the Federal Reserve stopped short at this week’s policy meeting of indicating that a further increase in US interest rates is on the cards for later this year.

Uncertainty over the path of interest rates has held gold in check since it rallied to more than two-year highs in the wake of Britain’s shock vote last month to leave the European Union.

Relief that the Fed was not more explicit about rates pulled it back to a two-week peak on Thursday. Spot gold was 0.2 per cent higher at $1,341.81 an ounce at 1340 GMT, having ended Wednesday up 1.5pc in the wake of the Fed statement. US gold futures for August delivery were up 1.1pc at $1,341.10.

“The gold price reacted quite positively to the news that there was no rate hike, and that a September rate hike is not certain,” Capital Economics analyst Simona Gambarini said. “But this is probably short-term volatility.”

The world’s largest gold-backed exchange-traded fund, SPDR Gold Shares, has seen an outflow of nearly 28 tonnes in the last three weeks.

Among other precious metals, palladium rose to its highest since mid-October at $708 an ounce, and was later at $700.22, down 0.2pc.

Platinum hit a fresh 14-month high at $1,154.20 and was later up 0.6pc at $1,139.40 an ounce. Silver was flat at $20.33 an ounce.

Published in Dawn, July 29th, 2016