Gold hits highest level in nearly two years after US Federal Reserve's dovish coos

Jessica Morris
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The Fed was more dovish than expected (Source: Getty)

The US Federal Reserve's dovish coos helped gold smash through the $1,300 mark for the first time since early May today.

Spot gold swelled 1.30 per cent to $1,308.1 per ounce this morning, having touched its highest level since August 2014 at $1,313.60 earlier.

US gold added 1.80 per cent to $1,311.3, after hitting its highest rate since since last August at 1,316.80.

Read more: Should you start hoarding gold?

It came after the Fed kept interest rates unchanged yesterday and said it still plans to hike rates twice this year, but cautioned slower economic growth would crimp the pace of monetary policy tightening in future.

Uncertainty about the impact of Britain's potential exit from the European Union following a referendum vote next week also sent worried investors flocking towards the safe haven.

Read more: Analysts puzzled as gold price suddenly drops

Naeem Aslam, chief market analyst at Think Forex, said: "Brexit fear and the doubts about the credibility of central banks strategies is pushing the precious metal higher today."

He continued: "The Fed’s policy decision is also the primary reason that we are seeing this surge for gold today. The committee has a very dovish mind with respect to the prospects of a further rate hike and this is serving as positive sentiment for gold investors."

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