Gold Stalled! Fed Decision Key
Gold prices remained subdued ahead of the Federal Reserve's interest rate decision on Wednesday (July 29). Spot gold fell 0.2% to US$4,020.90 per troy ounce, following a 1.1% drop in the previous session.
Pressure on gold persists as the market weighs the possibility of a Fed rate hike. Market participants see roughly a one-in-three chance of a 25-basis-point increase.
The Fed faces a difficult choice between lower-than-expected June inflation and rising oil prices driven by the US-Iran conflict. Oil prices rebounded after the US military reported thwarting an Iranian attack on a base in the Persian Gulf region.
Signals of a tighter policy stance could add further pressure on gold. High interest rates typically diminish the appeal of precious metals, as gold does not generate a yield.
Gold prices have fallen nearly 25% since the US-Iran conflict began over five months ago. Nevertheless, gold has held near the US$4,000 level since late June, supported by buying on price dips.
Silver held steady at US$57.16 per troy ounce after dropping more than 2% in the previous session. Gold's next move will largely depend on the Fed's decision and commentary regarding inflation risks and the interest rate outlook. (asd)*
Source: Newsmaker.id
