Spot Gold Steady Ahead of US Central Bank Policy Statement


Gold is used as a hedge against inflation and weakness of currency

Gold prices remained steady on Wednesday as investors awaited the results of the Federal Reserve’s policy meeting, which revealed the central bank’s plan to balance interest rates against inflation targets. Spot gold rose 0.1 percent to $ 1,957.45 an ounce. It had 0255 GMT (8:25 PM in India). US gold futures were stable at $ 1,966.20 an ounce.

“People are coming later today due to the Fed’s announcement,” said Brian Lan, managing director of Goldsilver Central, a dealer in Singapore.

“People are waiting for more clarity on the monetary instruments that the Fed is expected to use above 2 percent to support inflation.”

The Fed’s decision is due at 1800 GMT (11:30 am in India), followed by a news conference half an hour later by Chairman Jerome Powell.

The US central bank took a more aggressive stance towards inflation last month and promised to keep interest rates low.

“Markets want to see if the Fed will revise its language as expected, perhaps to the effect that it will keep rates low for some time (say three years) or perhaps do the same with the language of its inflation. Do. ” Said Edward Mir, analyst at ED & F Man Capital Markets in a note.

“But, we doubt that the Fed will lock itself into such definite language ahead of a possible turning point in the American economy.”

Lower US interest rates put pressure on the dollar and bond yields, increasing the appeal of non-yielding bullion. Gold is also used as a hedge against inflation and currency weakness.

Supporting gold, the dollar index fell 0.1 percent against a basket of major currencies.

Speaker of the US House of Representatives Nancy Pelosi said Democrats were open to an October delay to strike a deal with Republicans over a new coronovirus aid bill.

Elsewhere, silver fell 0.1 percent to $ 27.20 an ounce, platinum fell 0.7 percent to $ 971.11 and palladium slipped 1.4 percent to $ 2,375.83.

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