Why is Fed’s September meeting so important?

Wednesday will witness the outcome of the Federal Reserve’s September meeting ending at 2:30 pm ET and policy makers still have 3 monetary policy announcements before the end of 2021the year.
The meeting is expected to address the taper timeline, however investors eye the taper start date, in particular, so that they could make their investment related decisions.
The importance of the statements by the U. S. Federal Reserve lies in the fact that any reduced central bank’s stimulus and interest rate hikes tend to lift bond yields and accordingly could raise the opportunity cost of holding non-interest bearing gold.
It would also help boost the dollar, further weighing on bullion. Offering some break to gold, the U.S. dollar slipped 0.2% after hitting near a one-month peak in the preceding session.
With doubts over the stock market’s elevated trend despite Tuesday’s rebound, it is sensible to expect some safe-haven flows into gold amid risk of default contagion from the debt crisis.
Silver rose 1.4% to USD 22.56 per ounce, platinum climbed 2.5% to USD 933.8, and palladium gained 2% to USD 1,924.03.
Gold rose on Tuesday, pushed by the retreat of U. S. dollar. Investors remain focused on the outcome of the Federal Reserve’s two-day meeting, hoping to extract clues on the timeline for tapering of the central bank’s support for the U.S. economy.
Spot gold was up 0.5% at USD 1,772.96 per ounce by 1255 GMT, while U.S. gold futures were up 0.5% to USD 1,772.50.
The current market uncertainty is expected to change the anticipated taper timeline of the asset purchases.

Any changes would primarily put downward pressure on gold. The Fed will release a policy statement and new economic estimations at the end of its policy meeting on Wednesday.
Fed could postpone the start of the tapering of asset purchases in the fourth quarter, a procedure that will push gold even lower.
After a month’s high, the U. S. dollar slid prior to awaited Federal Reserve’s meeting.
Chair Jerome Powell will unlikely announce immediate end of the stimulus program this week as the recovery of the U. S. economy has encountered some roadblocks.
The Delta variant in addition to very disappointing employment data and changes in consumer sentiment on the back of rising Covid-19 cases, have pushed back expectations for the taper timeline.
If policymakers decide to trim QE before year-end, USD will possibly benefit from a potential selloff of equities.
Some economic data, including August jobs report and the current market volatility level, still assures that the Fed is far from providing any specific guidance tomorrow, though some weeks ago, investors expected the central bank to announce a tapering of massive pandemic stimulus program in September meeting, which began Tuesday.