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Gold prices traded in a narrow range on Wednesday as investors awaited the Federal Reserve’s policy decision later in the day after lower-than-expected inflation data raised expectations for a moderate path in interest rate hikes.
There was little change in the price of gold in spot transactions, and it settled at 1811.06 dollars an ounce, by 0706 GMT, after reaching the highest level in more than five months on Tuesday, as a less than expected rise in consumer prices in the United States reinforced bets on a slowdown. The rate of interest rate hike. US gold futures fell 0.1 percent to $1,823.40.
Market focus now shifts to the US central bank’s decision due at 1900 GMT. The Bank is widely expected to raise interest rates by 50 basis points at its last meeting this year.
Gold is known as a hedge against inflation, but high interest rates tend to weaken its attractiveness because they increase the opportunity cost of holding non-returnable metal.
As for other precious metals, spot silver rose 0.3% to $23.80 an ounce, platinum rose 0.2% to $1034.51, while palladium fell 0.1% to $1927.26.
