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Gold hits over five-year high

Gold prices jumped to their highest level in more than five years on Thursday, after the U.S. Federal Reserve signaled possible interest rate cuts later this year.

Spot gold was up 1.3% at $1,377.41 per ounce as of 0117 GMT, after hitting its highest since March 17, 2014 at $1,383.81.

U.S. gold futures surged 3% to $1,397.70 an ounce.

The Fed held interest rates steady, as expected, but said it “will act as appropriate to sustain” the country’s economic expansion as it approaches the 10-year mark and dropped a promise to be “patient” in adjusting rates.

The bulk of Fed policymakers slashed their rate outlook for the rest of the year by roughly half a percentage point, and Fed Chairman Jerome Powell said others agree the case for lower rates is building.

The market expects the Fed to cut rates as soon as next month.

The dollar index fell to a near one-week low on Thursday after the Fed signaled a possible rate cut by the end of the year, while 10-year U.S. Treasury yield dropped to its lowest level in nearly two years.

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