Gold Takes Hit Ahead of Fed Rate Decision

Gold prices took a hit on Wednesday as investors held their breath ahead of the US Federal Reserve's interest rate decision, where a hike is widely expected. Spot gold was down 0.1% at $4,288.48 per ounce, while U.S. gold futures for December delivery were also down 0.1% at $4,328.10.

Market analysts are predicting a 92.4% chance of at least a 25-basis-point rate hike later in the day, according to CME FedWatch. Frank Walbaum, a market analyst at trading platform Naga.com, noted that a hawkish Fed could further pull gold down, while any soft messaging may ease bets on hikes and help the metal recover.

The dollar remained strong, making greenback-priced gold more expensive for holders of other currencies. Oil prices hovered above $100 a barrel, adding to price pressures. Commerzbank said it was surprising that gold prices had not come under greater pressure so far, citing persistent fiscal concerns and elevated long-term government bond yields.