Gold flat as investors stay on sidelines ahead of Fed decision
Gold prices were flat in Asia trade on Wednesday as investors held back from placing large bets ahead of the U.S. Federal Reserve's policy decision, while also keeping a close watch on the developments surrounding the Israel-Iran conflict.
Anindito Mukherjee | Bloomberg | Getty Images
Gold prices edged lower on Wednesday as investors refrained from making significant bets ahead of the U.S. Federal Reserve's policy decision, while keeping a close watch on escalating developments in the Israel-Iran conflict.
Spot gold dipped 0.1% to $3,386.79 an ounce. U.S. gold futures fell 0.1% to $3,405.10.
All attention is on the Fed's two-day policy meeting, which concludes later in the day. The central bank is widely expected to keep rates steady but investors will look for signals on future cuts.
Investors will watch closely for Fed Chair Jerome Powell's remarks following the meeting.
"Traders are holding back ahead of the Federal Reserve's interest rate decision later today, while a slight uptick in risk appetite in equity markets is weighing on gold," said Ricardo Evangelista, senior analyst at brokerage firm ActivTrades.
S&P 500 futures added 0.2%, while Nasdaq futures gained about 0.3%.
Meanwhile, the conflict between Israel and Iran continues to fuel geopolitical instability which is keeping a floor under the market, Evangelista added.
Iran and Israel launched fresh missile strikes against each other on Wednesday, entering the sixth day of intense conflict.
The U.S. is deploying more fighter aircraft to the Middle East and extending the deployment of other warplanes, three U.S. officials told Reuters.
"While gold prices could feasibly fall from current levels over the next six months ... strong demand from central banks and Chinese investors – will limit any prices falls and keep gold above the $3,000 per ounce level," said Hamad Hussain, assistant climate and commodities economist at Capital Economics.
Elsewhere, spot silver was flat at $37.22 per ounce, platinum rose 1.1% to $1,276.73, while palladium gained 0.1% to $1,053.25.
