Business Standard

Gold firms above key $1,800 level ahead of US Fed policy verdict

Spot gold was up 0.4% at $1,806.00 per ounce, as of 0328 GMT. US gold futures rose 0.4% to $1,806.90


By Eileen Soreng
(Reuters) - Gold prices firmed on Wednesday above the key psychological level of $1,800 on a weaker dollar, though gains were curbed by investor caution ahead of a Federal Reserve meeting that could offer clues on the U.S. central bank's policy tapering plans.
Spot gold was up 0.4% at $1,806.00 per ounce, as of 0328 GMT. U.S. gold futures rose 0.4% to $1,806.90.
"Gold is benefiting from some risk-hedging buying by investors ahead of tonight's FOMC (Federal Open Market Committee) meeting outcome," Jeffrey Halley, a senior market analyst, Asia Pacific at OANDA said.
"Overall, gold remains anchored within a broader $1,790-$1,810 range and lacks the momentum to convincingly break either side for now. That may change post-FOMC."
Fed's policy statement is due at 1800 GMT later in the day followed by a news conference by Chairman Jerome Powell.
Bullion slumped 7% in June after the Fed struck a hawkish tone in its last meeting.
Investors will look for cues on when the central bank will begin to taper its monetary support amid fast-rising prices and any view on the looming threat from Delta variant of coronavirus.
The Fed will likely announce the first of a scheduled round of reductions to its bond purchase program, but will leave its rate rising schedule still some ways down the road, Edward Meir, analyst with ED&F Man Capital Markets said in a note.
However, "any selloff in gold will be more measured as the complex has discounted much of the Fed move already."
Meanwhile, the U.S. dollar was pinned below 3-1/2-month peak scaled last week, curbed by a decline in real yields and trepidation ahead of the Fed's policy decision.
Asian shares were also stuck at a seven-month trough on Wednesday.
Silver rose 0.6% to $24.81 per ounce, after having hit its lowest level in nearly four months at $24.46 on Tuesday.
Palladium edged up 0.3% to $2,615.60 per ounce, while platinum climbed 0.8% to $1,058.61.
(Reporting by Eileen Soreng in Bengaluru; Editing by Vinay Dwivedi and Sherry Jacob-Phillips)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Jul 28 2021 | 11:41 AM IST

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