Gold prices today: Gold hover above $2,000 ahead of US Fed rate verdict
Spot gold held its ground at $2,016.29 per ounce by 0140 GMT after rising more than 1% in the previous session, as yields dropped on renewed fears of contagion in the US banking sector.
US gold futures were up 0.1% at $2,026.10.
Fed’s rate decision is due at 1800 GMT. The market mostly expects the US central bank to raise interest rates by 25 basis points.
“If the Fed were to surprise with a pause, this would suggest a deepening banking crisis and would likely send gold higher,” said Clifford Bennett, chief economist at ACY Securities.
Bullion is known as a hedge against inflation and economic turbulence, but higher rates tend to dent zero-yielding asset’s appeal.
Data on Tuesday showed that US job openings dropped in March and layoffs increased to the highest level in more than two years, suggesting some softening in the labor market. If uncertainties about the banking crisis and concerns over a potential US debt default persist, dollar will loose its shine and more light will fall on gold, Bennett said.
Top US Senate Republicans on Tuesday called on President Joe Biden to accept their party’s debt-ceiling package or make a counter-offer, while a top Democrat said the Senate might try to advance a “clean” debt-ceiling hike next week.
Spot silver was down 0.2% at $25.33 per ounce.
Platinum fell 0.4% to $1,061.53, while palladium gained 0.4% to $1,434.62.
Analysts have cut their forecasts for palladium after prices of the metal used to neutralize harmful engine emissions fell, but rising vehicle production should limit any sell-off, a Reuters poll showed.
