Gold Prices Steady Ahead of US Federal Reserve Policy Decision
Gold prices remained steady on Tuesday after hitting a one-month low in the previous session, as investors awaited the US Federal Reserve's policy decision for clues on monetary policy.
The spot price of gold was little changed at $4,300.96 per ounce, while US gold futures were down 0.3% at $4,341.10.
Financial markets are betting that Fed policymakers will raise their benchmark rate by a quarter of a percentage point to a 3.75-4.00% range, which would be the start of a tightening cycle.
According to Tony Sycamore, an IG market analyst, 'How Fed Chair Kevin Warsh frames that hike will matter more than the hike itself for gold... If he casts it as the start of a meeting-by-meeting tightening cycle, that would be a hit to gold and to risk assets overall.'
Gold often loses appeal when rates increase, as they raise the opportunity cost of holding non-yielding bullion.