by BLOOMBERG / pic by TMR FILE 

GOLD extended gains in Asia on signs the Federal Reserve’s tightening path won’t be as severe as many investors were anticipating.

The precious metal rose almost 1% after closing 0.7% higher in the previous session. The U.S. central bank raised its benchmark rate by half a percentage point on Wednesday, but Chairman Jerome Powell said the Fed isn’t actively considering a bigger 75-basis-point rate hike in the near future.

Powell told reporters that only 50 basis-point increases were on the table at the next couple of meetings. 

That surprised some investors who had been expecting the Fed would opt for a three-quarter point move when it next meets in June. 

Higher interest rates and bond yields typically weigh on non- interesting bearing bullion. 

Holdings in gold-backed exchange- traded funds rose for the first time in a week and a half on Wednesday.

“Gold has taken the interest-rate increase in its stride, with the Fed’s accompanying commentary suggesting a positive environment for bullion because the monetary tightening in coming months won’t be as tight as some feared,” said Gavin Wendt, a senior resource analyst at MineLife Pty.

Bullion had been falling since mid-April on concerns over the likely pace of Fed rate increases, and was at a two-month low the day before the Powell comments. It’s garnered some support, however, from haven appeal as the war in Ukraine drags and the European Union announced a likely-inflationary ban on Russian oil imports. 

Spot gold rose 0.9% to $1,897.55 an ounce as of 9:00 a.m. in Singapore. The Bloomberg Dollar Spot Index was steady after falling 0.9% on Wednesday. Silver, platinum and palladium all advanced.