With the federal reserve Interest rate hike by 25 basis points on Wednesday and an indication that rate hikes could be suspended, gold prices hovered near record highs during Thursday morning’s Asia session.

What happened: The dollar index was also down 0.24%, supporting gold’s rally as it makes the dollar-priced commodity more affordable to buyers in other countries.

Also read: How to invest in gold

Spot gold was trading 0.16% higher near the $2,042 an ounce level at the time of writing. Earlier, the yellow metal broke through $2,072 an ounce and is nearing a record high of $2,072.49 an ounce, according to a Reuters report. The SPDR Gold Trust GLD and the iShares Gold Trust IAU increase by more than 0.8%.

Notable this time was the Fed’s change of language on future policy. The phrase “in determining the extent of future increases in target range” was removed from the May FOMC policy statement and replaced with “in determining the extent to which additional Policy tightening may be in order.”

Rate hike pause aside, that’s one thing that still speaks for itself Gold is its safe haven status as the banking turmoil seems far from over.

Expert Opinion: Yeap Jun RongMarket Analyst at I GReuters told Reuters that concerns in the banking sector remain unresolved, prompting a cautious stance on the risk environment and allowing gold to flow to safe havens in case of further fallout.

The analyst also said, “Low yields and a weaker dollar following the recent Fed meeting and changes in the language of the policy statement are raising belief that the central bank is likely to pause interest rates.”

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