Gold Prices Under Pressure Ahead of Fed Rate Decision
Gold prices remain under pressure ahead of the Federal Reserve's policy decision on Wednesday, where a rate hike is widely expected. Spot gold was down 0.1% at $4,288.48 per ounce as of 0143 GMT, while U.S. gold futures for December delivery were also down 0.1% at $4,328.10.
Market participants are pricing in a 92.4% chance of at least a 25-basis-point U.S. rate hike later today, according to CME FedWatch. A hawkish Federal Reserve could further pull gold down, while any soft messaging may ease bets on hikes and help the metal recover.
Frank Walbaum, a market analyst at trading platform Naga.com, noted that traders are also monitoring oil prices and developments in the Middle East. Gold is often seen as an inflation hedge, but higher rates increase the opportunity cost of holding non-yielding bullion.