Gold falls as investors await Fed announcements

Gold prices fell on Wednesday ahead of a crucial monetary policy announcement from the Federal Reserve, as investors await clues about the U.S. central bank’s plan to reduce its pandemic-induced stimulus amid signs of rising currency. inflation.

Spot gold was down 0.2% to $ 1,784.28 an ounce at 1141 GMT, while US gold futures for December delivery were down 0.2% to $ 1,785.50 an ounce.

“The markets are expecting the Fed to announce the start of the cut and are also setting prices for rate hikes for next year, not only from the Fed but from the European Central Bank.“Said Peter Fertig, an analyst at Quantitative Commodity Research, adding that the crucial question is how much the Fed will reduce monthly bond purchases.

The Fed’s announcement will be at 1800 GMT. The central bank is likely to start cutting its monthly asset purchases by $ 15 billion a month, ending them by mid-2022.

The Fed’s ultra-lax monetary policy has helped boost gold considerably since the financial crisis of the late 2000s, with low interest rates lowering the opportunity cost of holding assets like bullion and while inflation fears stoke the demand for coverage.

Market participants are also expecting a monetary policy meeting from the Bank of England on Thursday, after data suggested unemployment is unlikely to rise sharply, reinforcing the case for a rate hike.

Metal prices have ranged between slight gains and losses this week, and analysts have said the Fed’s decision could be the event that pushes gold out of that range.

Meanwhile, spot silver was up 0.3% to $ 23.59 an ounce and platinum was up 0.6% to $ 1,044.02 an ounce, while palladium was down 0.3% to $ 2,005. , 19 oz.