Picture: 123RF/LIMBI007
Picture: 123RF/LIMBI007

Bengaluru — Gold prices edged up on Wednesday, ahead of the US Federal Reserve’s policy signals later in the day on reducing stimulus for the world’s largest economy.

Spot gold rose 0.2% to $1,777.68/oz by 3.56am GMT, while US gold futures were flat at $1,778.00/oz.

In the absence of an official taper signal, gold could get some relief for the near term; however, the downtrend for the month would hold, DailyFX currency strategist Ilya Spivak said.

The Fed’s two-day meeting is due to conclude on Wednesday as investors focus on any new signals on when a taper may begin. The US central bank is also likely to provide an outlook on interest rate hikes from the current near zero level.

Wednesday’s statement will also offer Fed’s rate projections for 2024 for the first time.

“If it looks like over the course of the coming years, basically through the end of 2024, the Fed envisions more than 100 basis points in cumulative rate hikes that would be hawkish, and a negative catalyst for gold,” Spivak said.

An eventual interest-rate hike would raise the opportunity cost of holding the noninterest-bearing gold.

Stocks found support after debt-laden property developer China Evergrande said it would pay some bond interest due on Thursday, though investors stayed nervous.

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.1% to 1,000.79 tonnes on Tuesday from 1,001.66 tonnes on Monday.

Silver climbed 1.4% to $22.78/oz, while palladium gained 0.9% to $1,923.74. Platinum rose 0.3% to $956.61/oz. Prices rose 4.7% on Tuesday, its biggest one-day gain since February 10.

Reuters

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