Gold edges up as markets eye Fed’s decision on rates

BENGALURU: Gold inched up, after a near 1% jump in the previous session, as investors awaited a US Federal Reserve rate decision later in the week, while progress in Us-china trade talks curbed appetite for safe haven assets.

Spot gold rose 0.2% to US$1,506.95 per ounce. US gold futures were up 0.3% at US$1,509.60 per ounce.

“All eyes are on the Fed meeting now, but what investors are really looking forward to is some clarity on whether the central bank will continue to remain dovish for the rest of this year,” said John Sharma, an economist with National Australia Bank, adding that the current take on gold is “wait and see”.

The Fed is scheduled to meet on Oct 29 and Oct 30, with traders seeing a 90.4% chance for a 25 basis point rate cut, according to CME Group’s Fedwatch tool. The US central bank has already lowered interest rates twice this year.

“Gains (if the Fed cut rates this week) may be limited as trade tensions are not as tense as they were over the summer,” Axitrader market strategist Stephen Innes said in a note.

NAB’S Sharma said “any development on the trade war front will just have an interim effect on gold.”

“The situation is far more complicated to be solved in a hurry.”

Gold prices were also being weighed by a strong dollar, which makes the metal expensive for buyers holding other currencies.

The dollar index, which measures the greenback against a basket of other currencies, was slightly up yesterday after rising nearly 0.6% last week.

Elsewhere, silver rose 0.4% to US$18.09 per ounce. Platinum was up 0.2% at US$927.73 per ounce, while palladium rose 0.8% to US$1,777.08 per ounce.