Gold Edges Up as Market Awaits Fed Surprise
Gold prices edged higher during Wednesday's trading (July 29) ahead of the Federal Reserve's interest rate decision. Spot gold rose 0.3% to US$4,038.71 per troy ounce, while US futures contracts dipped slightly to US$4,037.65.
Gold's rise was supported by a roughly 0.1% weakening of the US dollar. However, the dollar index remained near a one-month high, capping gains for the precious metal.
The Fed is expected to keep interest rates unchanged at the conclusion of its two-day meeting. The market sees a 68% probability of rates remaining steady, while the likelihood of a 25-basis-point hike stands at around 32%.
Middle East tensions have escalated again after the US military intercepted Iranian missiles aimed at American forces. Iran also claimed to have targeted an airbase and US Central Command facilities in Jordan.
The conflict drove oil prices up by more than 4% and reignited inflation concerns. Rising energy costs could prompt the Fed to maintain a tight policy stance for longer, thereby exerting pressure on gold.
Silver rose 1.4% to US$57.94 per troy ounce, while platinum fell 0.5% to US$1,598.30. Gold's next move will depend heavily on the Fed's decision, comments from Kevin Warsh, and developments in the US-Iran conflict.
Source: Newsmaker.id
