By Eileen Soreng
(Reuters) – Gold prices rose on Wednesday on a softer dollar, while market participants awaited a U.S. Federal Reserve policy statement that could provide clues on the pace of future rate hikes.
Spot gold was up 0.2% at $1,650.49 per ounce, as of 0717 GMT, while U.S. gold futures gained 0.3% to $1,655.30.
The dollar index dipped 0.3%, making the greenback-priced gold less expensive for holders of other currencies.
“If we do get any sort of story for dollar weakness over that 50-basis-point hint from the Fed, then it shouldn’t be too hard for gold to get back up to $1,670, $1,680 even over the coming sessions,” said City Index analyst Matt Simpson.
The Fed is scheduled to release its policy statement at 1800 GMT, followed by Chair Jerome Powell’s press conference.
While a 75-basis-point rate increase is largely priced in, investors will seek clues on whether there is a possibility of the Fed slowing down its tightening pace.
For the December meeting, traders are split on the odds of a 75- or 50-bp rate hike.
The bigger picture is that the Fed is still going to continue hiking rates and could take them up to 5%, but the end of that hiking cycle is close, Simpson added.
Data on Tuesday showed U.S. job openings unexpectedly rose in September, highlighting a resilient labour market and that rapid interest rate hikes have yet to bite hard in the real economy.
Higher interest rates increase the opportunity cost of holding non-yielding bullion.
Spot silver was little changed at $19.64 per ounce, after climbing to a three-week peak on Tuesday.
“Silver is in high demand due to its use in solar energy and EV. Also, demand concerns eased on hope of China’s COVID policy easing,” said Ajay Kedia, director at Kedia Commodities in Mumbai.
Platinum gained 0.9% to $951.25 and palladium rose 1.2% to $1,903.42.
(Reporting by Eileen Soreng and Ashitha Shivaprasad in Bengaluru; Editing by Sherry Jacob-Phillips, Rashmi Aich and Subhranshu Sahu)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.
Source: The Print
