Gold traded with slight changes, near a five-month
high as investors assessed the outlook for U.S. interest rates
before the Federal Reserve's two-day meeting. Economists polled by Bloomberg suppose the Fed will stay focused on raising rates about mid-term.
The metal rose 9 percent this year on speculation the Fed will hold off raising borrowing costs amid concerns about the global economy.
Higher rates curb gold’s appeal because it offers returns only through price gains.
“It will be quite important to see what they do say
because this will be the first that we’ve heard from the Fed
since the SNB’s move and the ECB’s QE program was announced,”
Victor Thianpiriya, an analyst at Australia & New Zealand
Banking Group Ltd., said by phone from Singapore, referring to
quantitative easing.
“There’s still a lot of conjecture as to when” interest rates will increase, he said.
Bullion for April delivery was little changed at $1,291.20 an ounce by 7:46 a.m. on the Comex in New York, as Bloomberg reports. The precious metal reached $1,307.80 on Jan. 22, the highest since August. Futures trading volume was 54 percent higher than the average for the past 100 days for this time of day, according to data compiled by Bloomberg.
The Fed will leave rates unchanged Wednesday, a Bloomberg News survey of economists showed. Chair Janet Yellen said Dec. 17 the Fed is unlikely to move before end-April. The central bank has kept its target for the federal funds rate at zero to 0.25 percent since 2008.
Holdings in bullion-backed, exchange-traded products rose 7.9 metric tons to 1,656.2 tons on Tuesday, the highest since October.
Palladium for March delivery gained 0.9 percent to $787.80 an ounce on the New York Mercantile Exchange, while platinum for April delivery was little changed at $1,266 an ounce. Also on the Comex, silver for March delivery declined 0.2 percent to $18.05 an ounce.
