Gold prices rise 1% after Fed holds rates steady

Gold prices rose after the Federal Reserve held its benchmark interest rate steady on Wednesday (local time).

According to Reuters, spot gold was trading at $4,076.41 per ounce at around 2:16 p.m. Eastern time, shortly after the Fed announced its rate decision — up 1.2 percent from the previous session.

Before the Fed's decision, spot gold had briefly dipped below $4,000 per ounce during trading, weighed down by a sharp rise in oil prices and expectations that high interest rates would persist. Some cautionary selling had emerged ahead of the FOMC rate decision, as speculation grew that the Fed might deliver a surprise rate hike.

According to the CME FedWatch tool, interest rate futures markets had priced in roughly a one-in-three chance of a rate hike at this meeting, right up until the decision was announced. Markets had been uncertain because Kevin Warsh, the Fed's new chair, has minimized forward guidance on future policy direction, leaving investors with little clarity on what the central bank might do ahead of each meeting.

Metals trader Tai Wong told Reuters that it was worth noting that the three FOMC dissenters were regional Federal Reserve Bank presidents, not Fed governors. "Gold, which briefly dipped below $4,000 per ounce, now appears to be out of immediate danger," he said.