Gold rises above key $1,800 level

Bengaluru — Gold prices firmed on Wednesday above the key psychological level of $1,800 on a weaker dollar, though gains were curbed by investor caution ahead of a Federal Reserve meeting that could offer clues on the US central bank’s policy tapering plans.

Spot gold was up 0.4% at $1,806.00/oz, at 3.28am GMT. US gold futures rose 0.4% to $1,806.90.

“Gold is benefiting from some risk-hedging buying by investors ahead of tonight’s FOMC [Federal open market committee] meeting outcome,” Jeffrey Halley, a senior market analyst for Asia-Pacific at Oanda said.

“Overall, gold remains anchored within a broader $1,790-$1,810 range and lacks the momentum to convincingly break either side for now. That may change post-FOMC.”

Fed’s policy statement is due at 6pm GMT later in the day followed by a news conference by chair Jerome Powell.

Bullion slumped 7% in June after the Fed struck a hawkish tone in its last meeting.

Investors will look for cues on when the central bank will begin to taper its monetary support amid fast-rising prices and any view on the looming threat from Delta variant of coronavirus.

The Fed will likely announce the first of a scheduled round of reductions to its bond purchase programme, but will leave its rate rising schedule still some ways down the road, Edward Meir, analyst with ED&F Man Capital Markets said in a note.

However, “any sell-off in gold will be more measured as the complex has discounted much of the Fed move already”.

Meanwhile, the dollar was pinned below three-and-a-half-month peak scaled last week, curbed by a decline in real yields and trepidation ahead of the Fed’s policy decision.

Asian shares were also stuck at a seven-month trough on Wednesday.

Silver rose 0.6% to $24.81/oz, after having hit its lowest level in nearly four months at $24.46 on Tuesday.

Palladium edged up 0.3% to $2,615.60/oz, while platinum climbed 0.8% to $1,058.61.

Reuters