Gold trades little changed ahead of Fed decision

BENGALURU: Gold prices were little changed on Wednesday ahead of the US Federal Reserve’s policy decision which could give cues on future rate hikes.


Spot gold was nearly unchanged at $ 1,295.22 per ounce at 0051 GMT.

US gold futures for August delivery were 0.1 per cent lower at $ 1,298.80 per ounce.

The dollar index against a basket of six major currencies

inched up 0.03 per cent to 93.834 after rising 0.24 per cent the previous day. The dollar was 0.1 per cent higher at 110.42 yen after touching 110.54, its highest since May 23.

With the Federal Reserve virtually guaranteed to raise interest rates at its two-day meeting this week, investors are focused on how the US central bank characterizes its monetary policy as borrowing costs return to more normal levels amid an ongoing economic expansion.

The US central bank’s staunchest advocate for faster interest-rate hikes is set to regain the power to vote at the Federal Reserve’s rate-setting meetings starting next month, but the shift is unlikely to mean faster rate hikes under Chair Jerome Powell.

US monthly consumer inflation rose moderately in May as gasoline price increases slowed, suggesting the Federal Reserve could continue to gradually raise interest rates this year.

A Fed statement and press conference is expected from 2 p.m. EDT (1800 GMT) on Wednesday.

US President Donald Trump made a stunning concession to North Korean leader Kim Jong Un on Tuesday about halting military exercises, pulling a surprise at a summit that baffled allies, military officials and lawmakers from his own Republican Party.

Trump on Tuesday kept up his feud with America’s closest allies over trade, saying he could not allow them to continue taking advantage of the United States.

Canadian Prime Minister Justin Trudeau, facing the threat of a trade war from Trump, has unanimous domestic support for now but to keep a firm hold on power must wring concessions from an unwilling powerful dairy lobby in order to mollify Washington.

Italy’s new minister for EU affairs sought to reassure investors and other European capitals on Tuesday about the government’s stance on monetary union, saying the euro was “indispensable”, and denying he ever suggested leaving the single currency.

European Central Bank policymaker Ewald Nowotny views the situation in Italy with concern but does not believe it will “come to an actual crisis”, he was quoted as saying by Austrian newspaper Kleine Zeitung on Tuesday.