(Bloomberg) — Spot gold headed for the biggest gain in three weeks after Federal Reserve officials stuck with a projection for three interest-rate increases in the coming year, easing concerns that quickening economic growth would spur an even faster pace of monetary tightening.

By a 7-2 vote, the Fed on Wednesday raised the benchmark lending rate by a quarter percentage point, its third hike this year. In a statement following a two-day meeting, the Federal Open Market Committee omitted prior language saying it expected the labor market would strengthen further.

“Gold moved up in its initial reaction because Fed is dovish in terms of a rate hike vision for 2018, and it sees only three rate hikes, not four,” Naeem Aslam, chief market analyst at TF Global Markets in London, said in a note.

After surging through much of the first nine months of 2017, gold is on course for its worst quarter in a year. Demand for the metal as a haven has languished amid surging equity markets and improving economic data, which boosted expectations that the Fed would tighten monetary policy this month. Higher rates make bullion less competitive against interest-bearing assets.

Gold for immediate delivery advanced 0.7 percent to $1,252.67 an ounce at 2:30 p.m. New York time. A close at that price would mark the biggest gain since Nov. 22.

“It’s hawkish on rates, but it is to be expected,” Bob Haberkorn, a senior market strategist at RJO Futures in Chicago, said in a telephone interview. “There were two members that dissented. That’s supportive for gold bulls.”

Story by Susanne Barton.

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