Gold holds near $4,300 as Fed raises rates 25 basis points

Gold prices gave up most of their early gains to trade little changed around $4,300 an ounce on Wednesday after the Fed raised the federal funds rate by 25 basis points, as expected. The central bank also signalled at least one further rate increase this year as it seeks to contain persistently high inflation. The Bank of England is expected to keep borrowing costs unchanged tomorrow, while the Bank of Japan is scheduled to raise rates on Friday. The European Central Bank raised borrowing costs for the second time this year last week. Oil prices declined, but fragile conditions in the Middle East continue to keep supply risks elevated. The ongoing energy shock is expected to add to inflationary pressure and could lead to further monetary tightening.