Gold prices have declined more than $140 after reaching a record high of $2,431.29 on April 12
In early trading, spot gold reached as low as $2,286.53, after it fell as much as 2 percent on Tuesday to hit its lowest level since April 5
Gold prices exhibited a marginal increase on Wednesday as investors opted for caution ahead of the highly anticipated U.S. Federal Reserve policy decision.
In Saudi Arabia, 24-carat gold saw a 0.26 percent decline to SAR275.72 per gram and SAR8,577.26 per ounce.
Globally, spot gold saw a 0.05 percent increase to $2,287.28 per ounce, as of 5:36 GMT. Meanwhile, U.S. gold futures saw a 0.22 percent decline to $2,297.90. In early trading, spot gold reached as low as $2,286.53, after it fell as much as 2 percent on Tuesday to hit its lowest level since April 5. Gold prices have declined more than $140 after reaching a record high of $2,431.29 on April 12.
Central bank’s policy decision
All eyes are now on the U.S. central bank’s policy decision due on Wednesday, with investors eagerly awaiting cues on the Fed’s stance regarding its rate-cut timeline. Chair Jerome Powell’s subsequent remarks will be closely monitored for any indications of a potential shift in monetary policy. Markets expect the Fed to hold its benchmark interest rate steady at 5.25 to 5.5 percent.
Analysts highlighted the lack of progress in inflation readings thus far in 2024, suggesting a potential shift towards a more hawkish tone from the Fed. This anticipation impacts the gold market, contributing to its current lackluster performance. Moreover, they cautioned that a hawkish stance from Powell could trigger a further decline in gold prices by $30 to $40 following the announcement.
Gold is known as an inflation hedge. However, high interest rates reduce the appeal of holding non-yielding assets like gold.
Read: Oil prices dip ahead of Fed meeting as supply disruptions cool
Other precious metals
In addition to gold prices, spot gold saw a 0.8 percent increase to $26.35. Meanwhile, platinum increased 0.08 percent to $934.30. However, palladium declined 0.48 percent to $942.76 after hitting its lowest in nearly two months in the previous session.
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