Gold Prices Rise Ahead of Fed Decision Amid Inflation Concerns
Gold prices have been inching upwards as investors await the Federal Reserve's policy decision. The market is pricing in a near-certain interest-rate hike, with a 92% probability of a rate increase.
As inflation concerns rise due to high oil prices, gold has become an attractive safe-haven asset for investors. However, since gold pays no yield, higher borrowing costs tend to weigh on its price.
In the UAE, 24-karat gold is trading at Dh521.25 per gram, up from Dh517.50 overnight. Bullion was trading around $4,326.82 an ounce, up 30 points from the previous day. Silver has also gained, rising by 1.93% to $64.56/oz.
Experts warn that a hawkish vote and messaging from the Fed could lift yields again and pressure gold prices. Andrei Constantin, Commercial Director at TFP Software FZCO, noted that 'softer communication may ease the tightening of bets and help gold extend its rebound.'