Gold prices held steady on Wednesday after falling to a one-week low in the previous session, as investors waited for clues on the pace of future interest rate hikes by the US Federal Reserve when its policy meeting concludes later in the day. Spot gold was little changed at $1,295.02 per ounce at 0634 GMT after it touched a one-week low of $1,292.60 in the previous session.
US gold futures for August delivery were 0.1 percent lower at $1,298.50 per ounce. "The rate hike is almost a done deal, it is quite clear that they will most likely increase rates by another 25 basis points, but the market watchers are looking very closely on the language rather than the rate hike," said OCBC analyst Barnabas Gan.
"People will be looking very closely to see if there's any forward guidance that will indicate if there will be a fourth rate hike into the year-end." Gold is highly sensitive to US interest rates, which lift the opportunity cost of holding non-yielding bullion and boost the dollar, in which it is priced.
"Beyond the Fed, the ECB meeting tomorrow will also be important. Both the meetings have come hand-in-hand in trying to think about how gold prices will move," OCBC's Gan said. The yellow metal is biased to drop sharply towards a range of $1,263-$1,278 per ounce, as its consolidation within a wedge is ending, Reuters technical analyst Wang Tao said.
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