The price of gold rose on Thursday but remains below the psychological level of $2,000 amid the decline in Treasury yields and the weakening of the US dollar.
The Fed's decision and the possible escalation of the conflict between Israel and Hamas supported the precious metal.
The Federal Reserve (Fed) kept interest rates in the range of 5.25% to 5.50%. Fed Chairman Jerome Powell emphasized during a press conference that, given the uncertain situation, the best course of action for now is to keep rates on hold.
Markets expect the Fed to start lowering rates in mid-2024.
In his latest statement, Israel's Prime Minister rejected any possibility of a ceasefire, pointing out that such statements are a call for Israel to surrender to Hamas and to terrorism.
The yield on the 10-year U.S. Treasury note is falling following the Federal Reserve's decision to keep monetary policy on hold and is at 4.7% at the time of writing.
The U.S. Dollar Index (DXY), which tracks the greenback's performance against the world's major currencies, has fallen to 106.18, also providing support for gold bullion.
However, investors should note that the positive tone in the equity markets could be a key factor preventing gold bullion prices from rising.
Currently, the XAU/USD pair is up 0.09% at $1,986.88.
The key resistance level for the asset remains at $2,000, which, if breached, would take gold to $2,010. A close above this level would create bullish momentum for a move to the $2,020 area.
A decline in gold to support at $1,970 with a subsequent breakdown will open the way to $1,950 and below.
Read also: BTC trades above $35,000.