On Wednesday, gold prices were muted as investors kept a close eye on the U.S. Federal Reserve’s policy decision and its revised economic outlook in light of the recent spike in fuel costs, which has added to inflationary pressures.
By 0319 GMT, spot gold was stable at $1,930.51 per ounce, remaining under the peak mark set on Tuesday since September 5. To $1,951.70, U.S. gold futures declined by 0.1%.
A fresh policy statement and interest rate decision will be made by the Fed’s rate-setting policy committee at 1800 GMT, and Fed Chair Jerome Powell will hold a press conference at 1830 GMT.
According to Yeap Jun Rong, a market strategist at IG, “Thus far, real Treasury yields have remained elevated in the lead-up to the upcoming Fed meeting, which reflects broad positioning in place for a hawkish-pause scenario from the Fed and kept gold prices on some caution.”
Later in the day, interest rates are almost probably going to remain unchanged, but attention is still being paid to the revised economic forecasts and whether Fed officials believe rates still need to increase before the end of the year.
Rising oil prices have exacerbated concerns about inflation and predictions that the U.S. central bank will maintain higher interest rates for longer.
In light of the economy’s full employment, U.S. growth must slow to a rate closer to its potential in order to reduce inflation back to goal levels, according to Treasury Secretary Janet Yellen on Tuesday.
The Asian Development Bank (ADB) has predicted that this year’s economic growth in emerging Asia will be slightly weaker than anticipated due to the weakening Chinese real estate market and potential dangers from El Nio.
The largest gold-backed exchange-traded fund in the world, SPDR Gold Trust, reported that its holdings decreased by 0.2% on Tuesday.
Spot silver prices declined by 0.8% to $23.05 an ounce, platinum prices dropped by 0.4% to $935.25, while palladium prices increased by 0.1% to $1,261.15.