By Bharat Gautam
(Reuters) - May 5 (Reuters) - Gold prices climbed on Thursday, as the Federal Reserve expectedly raised interest rates by 50 basis points to tackle inflation, which the U.S. central bank highlighted as a risk to the economy while also ruling out larger hikes for the year.
Spot gold XAU= was up 0.9% at $1,898.06 per ounce, as of 0102 GMT, after rising 1% earlier in the session. U.S. gold futures GCv1 rose 1.4% to $1,894.20.
The Federal Reserve on Wednesday raised its benchmark overnight interest rate by half a percentage point, the biggest jump in 22 years, and Fed Chair Jerome Powell made an appeal to Americans struggling with high inflation to be patient while officials take the hard measures to bring it under control. (Full Story)
Gold is often perceived as a hedge against rising costs and jumped 1% in the previous session on Powell's statement.
U.S. Treasury yields fell sharply on Wednesday, supporting gold, after Powell said the central bank has ruled out, for now, a rate hike of three-quarters of a percentage point at upcoming monetary policy meetings. US/
Higher short-term U.S. interest rates and bond yields tend to increase the opportunity cost of holding bullion, which yields nothing.
The dollar steadied near a one-week low it hit in the previous session, making gold more attractive for overseas buyers. USD/
Spot silver XAG= climbed 1.1% $23.19 per ounce, platinum XPT= firmed 0.6% to $997.19, and palladium XPD= gained 0.8% to $2,274.43.
(Reporting by Bharat Govind Gautam in Bengaluru; Editing by Sherry Jacob-Phillips)
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