ASX 200 gold shares just added billions of dollars to their valuations. What's going on?

S&P/ASX 200 Index (ASX: XJO) gold shares are enjoying an absolutely stellar run higher today.

During the Thursday lunch hour, the ASX 200 is up a very solid 1.4%.

You're unlikely to hear any complaints about that performance.

But it pales in comparison to the gains being realised by most Aussie gold stocks.

This sees the S&P/ASX All Ordinaries Gold Index (ASX: XGD) – which also contains some smaller miners outside of the ASX 200 – up a whopping 6.1%.

Here's how these top ASX 200 gold shares are tracking at this same time:

• Northern Star Resources Ltd (ASX: NST) shares are up 7.4%
• Newmont Corp (ASX: NEM) shares are up 5.1%
• De Grey Mining Ltd (ASX: DEG) shares are up 7.6%
• Ramelius Resources Ltd (ASX: RMS) shares are up 5.3%
• Gold Road Resources Ltd (ASX: GOR) shares are up 7.6%
• Evolution Mining Ltd (ASX: EVN) shares are up 4.9%
• Bellevue Gold Ltd (ASX: BGL) shares are up 4.4%

And mind you, these are all multi-billion-dollar gold producers.

The intraday gains posted by Northern Star alone just added $1.1 billion to the miner's market cap.

I'll let you do the rest of the maths for total dollar gains from the above list of ASX 200 gold shares.

But trust me, it's big!

So, what's driving this surge?

Why are ASX 200 gold shares rocketing on Thursday?

Investors have US Federal Reserve chair Jerome Powell, and the Federal Open Market Committee (FOMC) to thank for today's sharp rally.

As we reported earlier, while most Aussies were asleep, the FOMC voted unanimously to keep the benchmark US interest rate on hold in the target range of 5.25% to 5.50%. This marks the third consecutive meeting that the world's most influential central bank has held rates on hold as Powell signalled that inflation was coming under control in the US.

Gold, which pays no yield itself, tends to catch headwinds from higher rates.

And in the wake of the Fed's decision the gold price gained 0.4% to US$2,034 per ounce. It's since retraced a touch, trading for US$2,031 per ounce. That's up from US$1,979 per ounce on Tuesday.

But it's not just the widely expected pause that's seeing ASX 200 gold shares soaring today.

With inflation coming down while the US jobs market remains strong, some dovish language from the FOMC has upped the odds that the Fed will begin cutting interest rates in 2024.

According to Brent Donnelly, president of Spectra Markets (quoted by Bloomberg), "Powell gave a nod to the outside chance of another hike but sent a clear signal that the FOMC has changed direction, and the question is not if they cut, but when."

If the Fed does start reducing interest rates next year, ASX 200 gold shares could be in for some more welcome tailwinds.