* Dollar hits 21-mth low against yen
* Silver trades at six-week high
(Adds comment, updates prices)
By Vijaykumar Vedala
BENGALURU, June 16 (Reuters) - Gold jumped to its highest in
nearly two years on Thursday, after the U.S. Federal Reserve
indicated it could be less aggressive in tightening monetary
policy next year.
Spot gold XAU= had climbed 1.7 percent to $1,312.55 an
ounce by 0648 GMT, after touching its highest since August 2014
at $1,313.60.
U.S. gold GCcv1 rose 2.2 percent to $1,316.30, after
marking its strongest level since last August at 1,316.80.
The Fed kept interest rates unchanged on Wednesday and
signalled it still planned to raise rates twice in 2016, though
it said slower economic growth would crimp the pace of monetary
policy tightening in future years.
Gold is sensitive to interest rate hikes, which increase the
opportunity cost of holding the non-interest yielding metal.
The bullish impact of the FOMC's decision to leave rates
unchanged and the tone of the statement are near-term gold
bullish, HSBC analyst James Steel said in a note.
"But the impact may be limited as the market had already
largely ruled out a near-term rate rise and we do not believe
the following Fed statement was outside of expectations," he
said, adding the central bank's policy was shaping up to be
long-term supportive of gold.
A small majority of Wall Street's top banks expects the Fed
to raise interest rates no more than once this year, results of
a Reuters poll showed on Wednesday.
The Fed's cautious stance comes ahead of a referendum in
Britain on June 23 on whether it would exit the 28-member
European Union. The move dubbed Brexit could tip Europe back
into a recession, putting more pressure on the global economy
and boosting the safe-haven appeal of bullion.
"The Fed's outlook was surprising since the U.S. economy has
been doing relatively well compared to the rest of the world.
The market will now monitor the Brexit situation more closely,"
said Brian Lan, managing director at Singapore-based gold dealer
GoldSilver Central.
"The next level gold is expected to see is $1,325," he
added.
Asian stocks turned lower on Thursday, while the dollar slid
to a 21-month low against the yen after the Bank of Japan
refrained from taking further stimulus steps, hours after the
Fed's review. MKTS/GLOB USD/
Holdings in SPDR Gold Trust GLD , the world's largest
gold-backed exchange-traded fund, rose 0.23 percent to 900.75
tonnes on Wednesday, the highest since October 2013. GOL/ETF
Spot silver XAG= climbed as far as $17.86, its strongest
since May 2, before trading 2-percent higher at $17.85 per
ounce.
Among other precious metals, spot platinum XPT= gained 1.6
percent to $986.30 per ounce and spot palladium XPD= climbed 1
percent to $537.22 per ounce.