Gold Prices Surge Ahead of Fed Rate Decision
Gold prices surged on Wednesday as investors braced for the US Federal Reserve's interest rate decision, with markets influenced by a weaker dollar and lower oil prices. Spot gold gained 1.3% to $4,347.91 an ounce by 1208 GMT after touching a more than one-month low on Monday.
The rise in gold prices followed a decline in the value of the US dollar, which makes gold cheaper for buyers using other currencies. Lower bond yields also improved the relative appeal of gold since it doesn't pay interest.
The Federal Reserve is set to announce its rate decision at 1800 GMT, with markets pricing in a 93% chance of at least a 25-basis-point increase in US interest rates. Higher rates can weigh on gold as they increase the return available from interest-bearing assets.