Gold reaches a two-week high as the Fed meeting dominates the markets

Gold reaches a two-week high as the Fed meeting dominates the markets

Gold reaches a two-week high as the Fed meeting dominates the markets

At 12:09 p.m. (1709 GMT), spot gold was up 0.2% at $2,035.32 an ounce, having reached its highest level since January 16 during the previous session. US gold futures increased to $2,034.20, up 0.5%.

Gold is supported by low Treasury rates and a weak currency.Tuesday's price peak came as attention was focused on the Federal Reserve's policy meeting and the timing of this year's interest rate decrease.

At 12:09 p.m. (1709 GMT), spot gold was up 0.2% at $2,035.32 an ounce, having reached its highest level since January 16 during the previous session. US gold futures increased to $2,034.20, up 0.5%.

Senior market analyst at RJO Futures Daniel Pavillonis said, "We are seeing a rally in the market due to anticipating of the Fed interest rate decision on Wednesday. A big part of the rise in gold comes from the fact that rates are coming decreasing and the dollar is in the red.""Have been."

Holders of foreign currencies found gold more appealing when the dollar index dropped by 0.2%. The yield on the benchmark 10-year Treasury fell to a 2-week low. [USD/] [US/]

Having bullion has a lower opportunity cost when interest rates are low.

The Fed is expected to announce its policy decision on Wednesday, likely taking a dovish position at its December meeting. At the conclusion of the two days of meetings, markets mostly anticipate that the US central bank will maintain current rates.

According to Pavillonis, Powell will maintain his neutrality and discuss the potential of cutting interest rates since the Fed wants to see a stable market, which means there won't be many rate drops.

The US price index increased somewhat in December, according to data released last week. This kept annual inflation below 3% for the third straight month and may have opened the door for the Fed to lower interest rates this year.

A Reuters poll released on Monday suggested that gold prices may reach all-time highs in 2024 due to economic uncertainty and US interest rate decreases. [PREC/POLL]

Earlier in the day, spot silver reached its highest level since January 15 but then dropped 0.4% to $23.11 an ounce. Palladium dropped 0.6% to $977.51 while spot platinum slipped 0.6% to $921.70 per ounce.