Gold edges higher

LONDON: Gold firmed on Wednesday, recovering from the previous session’s near two-week low, but moves were muted as traders awaited the outcome of the Federal Reserve’s latest policy meeting.

Gold is highly sensitive to rising US interest rates, which increase the opportunity cost of holding nonyielding bullion while boosting the dollar.

Markets await fresh clues on policy after scaling back their expectations for further US rate hikes this year over the last few months. Spot gold was up 0.1 percent at $1,266.27 an ounce at 1150 GMT, having touched its weakest since June 2 on Tuesday at $1,259.16.

US gold futures for August delivery were down 50 cents an ounce at $1,268.10. Equity markets climbed, though concerns about stretched valuations and caution ahead of the nearcertain rate hike kept a lid on gains. The dollar held steady against a currency basket. Silver also climbed, up 0.5 percent at $16.95 an ounce after hitting its lowest in nearly a month the previous day at $16.68. Platinum, which also hit a near one-month low of $918.50 on Tuesday, was down 0.3 percent at $920.25 an ounce. Palladium, which hit a 16-year high last week at $914.70, was down 0.2 percent at $880.50 per ounce.

“The palladium price is expected to see a correction in the short term after the exaggerated increase in the last few weeks,” Commerzbank said in a note. “Afterward the palladium price should rise to $850 per troy ounce by year-end due to the expected large supply deficit and the positive price trend in precious metals in general.”