Gold holds tight range with focus on Fed policy meeting

(Reuters) – Gold held near a two-week peak on Tuesday, although prices were stuck in a narrow range as focus turned to the Federal Reserve’s policy meeting for updates on the interest rate outlook and economic projections.

Ingots of 99.99 percent pure silver are placed in a workroom at the Novosibirsk precious metals refining and manufacturing plant in the Siberian city of Novosibirsk, Russia, September 15, 2023. REUTERS/Alexander Manzyuk

Spot gold was flat at $1,932.93 per ounce at 12:15 p.m. EDT (1615 GMT) after hitting its highest since Sept. 5 earlier in the session. U.S. gold futures gained 0.1% to $1,954.50.

Investors will be looking out for updated forecasts from Fed officials at the end of a two-day policy meeting on Wednesday, after a recent raft of strong U.S. economic data reduced recession fears.

Traders expect a 99% chance of the Fed leaving rates unchanged at the end of its meeting, with a 35% probability of another rate hike before 2024, according to the CME’s FedWatch Tool.

“The expectation is that the Fed is still going to lean hawkish on monetary policy tomorrow because they want to get inflation closer to their 2% target, which would be not good for gold,” said Jim Wyckoff, senior market analyst at Kitco.

“The important thing will be the press conference from Chair Jerome Powell and a statement possibly hinting what the Fed might do into the end of the year,” Wyckoff added.

The prospect of the Fed holding rates higher for longer has lifted benchmark 10-year Treasury yields to 16-year highs, denting non-yielding bullion’s appeal. [US/]

Also on the radar, central bank meetings at the Bank of Japan, the Bank of England and the Swiss National Bank, among others, are due this week.

Meanwhile, Swiss gold exports rose 7.3% in August from July as higher deliveries to India and China offset lower supplies to Turkey, customs data showed.

Silver eased 0.3% to $23.16 per ounce, platinum gained 1.1% to $943.09, and palladium climbed 1.9% to $1,260.03.

Reporting by Brijesh Patel in Bengaluru; Editing by Mark Potter and Richard Chang

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