Wednesday’s tight range in gold prices was caused by investors staying away from large wagers ahead of the U.S. Federal Reserve’s policy announcement and Fed Chair Jerome Powell’s comments later in the day
Spot gold was up 0.1% at $2,159.50 an ounce. Additionally, U.S. gold futures increased by 0.1% to $2,162.60.
The Federal Open Market Committee’s policy announcement, which is due at 1800 GMT, will be the focus of the markets. Powell’s press conference is scheduled for 1830 GMT.
While traders are anticipating the U.S. central bank’s economic and interest rate projections for the remainder of the year; rates are projected to remain unchanged.
The U.S. producer and consumer price index data from last week came in hotter than anticipated, dimming expectations for an early rate cut by the Federal Reserve.
The CME FedWatch Tool indicates that traders are presently pricing in a roughly 61% possibility of a rate drop from the Fed in June. Additionally, the opportunity cost of storing non-yielding bullion is reduced by lower interest rates.
The dollar remained stable following its peak of almost two weeks earlier in the day. Gold becomes more costly for holders of foreign currencies when the dollar strengthens.
The largest exchange-traded fund backed by gold in the world, SPDR Gold Trust, reported that its holdings increased by 0.48% to 837.35 tons on Tuesday from 833.32 tons the previous day.
Swiss gold exports decreased month over month in February after reaching an eight-year high driven by demand ahead of China’s Lunar New Year vacation, according to customs data released on Tuesday.
Spot silver increased by 0.1% to $24.94 an ounce, palladium increased by 0.1% to $991.43, and platinum decreased by 0.3% to $891.50.
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