NEW YORK: Gold prices rose on Wednesday, helped by a pullback in the dollar and bond yields ahead of an expected rate-hike from the US Federal Reserve and comments from Chair Jerome Powell later in the day.
Spot gold was up 0.4% at $1,972.59 per ounce by 12:08 p.m. EDT (1608 GMT), while US gold futures gained 0.5% to $1,973.70.
“There is some short-covering from the futures traders ahead of the Fed decision. The weaker dollar index and a slight dip in treasury yields are also probably prompting some buying interest,” said Jim Wyckoff, senior market analyst at Kitco.
The dollar index slipped 0.2% against its rivals, making gold less expensive for other currency holders. US 10-year Treasury yields fell to 3.872%.
The Fed is expected to raise rates by a quarter of a percentage point, marking the 11th hike in its last 12 policy meetings and possibly its last.
However, the focus for traders will be on Powell’s press conference at 02:30 p.m. EDT (1830 GMT) for more clarity on interest rates outlook.
“If Powell leans a little less hawkish that’s going to be supportive for the gold market because it’s probably going to pressure the US dollar index... The near-term technical posture for gold is slightly bullish,” Wyckoff said.
Also on the radar, policy decisions from the European Central Bank and Bank of Japan are due this week.
Rising interest rates increase the opportunity cost of holding non-yielding bullion.
“A sense of optimism prevails in the gold markets, with most investors anticipating that gold will profit from the end of the central banks’ tightening process,” Carlo Alberto De Casa, market analyst at Kinesis Money, said in a note.
Elsewhere, silver gained 0.7% to $24.88 per ounce, platinum fell 0.4% to $961.30, while palladium lost 2.2% to $1,255.82.
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