Gold Is ‘Treading Water’ as Investors Await Fed Meeting
(Bloomberg) -- Gold steadied near a four-week low as investors awaited the conclusion of the Federal Reserve’s two-day meeting for clues on monetary policy.
Markets are watching to see whether the Fed will start discussions about scaling back unprecedented support for the economy -- though analysts say actual steps in that direction are likely still months off. Higher interest rates curb the appeal of the non-interest-bearing metal.
“Gold is treading water” ahead of the Fed meeting, Ole Hansen, head of commodity strategy at Saxo Bank A/S, said by email. “While no change in policy is expected, Fed officials will release of a new set of policy and economic forecasts in which they could project interest-rate liftoff in 2023.”
Gold has been buffeted by worries over the outlook for monetary policy after reaching an almost five-month high in early June. Fed officials could project an interest-rate increase in 2023, but they won’t signal scaling back bond purchases until August or September, according to economists surveyed by Bloomberg.
Spot gold was little changed at $1,859.67 at 1:39 p.m. in New York. Prices slumped to $1,844.92 on Monday, the lowest intraday level since May 17. Futures for August delivery on the Comex rose 0.3% to settle at $1,861.40. Spot silver and palladium rose, while platinum fell.
©2021 Bloomberg L.P.