Prior to the anticipated Fed rate pause, gold prices remain in a narrow range

18 Sep 2023 , 10:55 AM

As investors continued to factor in a pause in interest rate increases by the Federal Reserve at their policy meeting this week with a focus on the U.S. central bank’s rate outlook, gold prices were unchanged on Monday.

Spot gold was dormant at $1,924.29 per ounce. At $1,946.10, U.S. gold futures were stable.

In a week filled with central bank meetings, which will be widely watched for the outlook on interest rates throughout the world, Asian shares opened Monday’s trading cautiously.

The conditions have been set for a fresh batch of forecasts from Fed officials this week that are likely to reflect their rising confidence in the possibilities for an economic soft landing due to faster growth, lower inflation, and a job market that won’t quit.

As a weakening economy starts to alarm policymakers, the Bank of England is set to increase interest rates once again this week. This could be the final tightening cycle of the previous 100 years.

The main event of the week in Asia is the policy meeting of the Bank of Japan on Friday.

Despite a fall in motor vehicle production, U.S. manufacturing output slightly increased in August. Activity may decline going forward as a result of strikes by the United Auto Workers (UAW) union at 3 factories.

Last week, Chinese gold prices reached new highs, continuing a months-long uptrend as investors bought the safe-haven asset to counteract the weakening yuan. Along with the increase in physical gold premiums, there were no new import quotas.

The largest gold-backed exchange-traded fund in the world, SPDR Gold Trust, reported that its holdings increased by 0.1% to 880.27 tonnes on Friday.

In the week ending September 12, statistics showed that COMEX gold speculators reduced their net long position by 16,544 contracts to 49,796 contracts.

Spot silver increased by 0.3% to $23.07 an ounce, platinum increased by 0.2% to $927.29, while palladium was unchanged at $1,248.73.

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