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LONDON. — Gold recovered from a three-week low as the dollar eased on profit-taking ahead of the US Federal Reserve’s meeting later yesterday, which could provide further clues on the pace of expected interest rate increases. With a rate rise of 25 basis points seen as a done deal, investors will be on the lookout for whether the Fed forecasts four increases in 2018, one more than previously forecast. Spot gold was up 0,4 percent at $1,315.71 an ounce at 1111 GMT, having dropped as low as $1,306.91 in the previous session.
US gold futures for April delivery rose 0,3 percent to $1,315.40.
“A 25 base hike is priced in, so the potential impact could come from the statement and what happens to the Fed projection for inflation and rate expectations in 2018,” said Capital Economics commodities economist Simona Gambarini.
The dollar index, which measures the greenback against a basket of six major currencies, slipped 0,3 percent to 90,135 after climbing to its highest since March 1 in the previous session. A weaker greenback makes dollar-denominated assets such as gold cheaper for holders of other currencies.
“The US dollar has been the primary driver of the gold price over the last week, and market reaction to tonight’s FOMC announcement is likely to dictate any near-term move,” MKS said in a note.
“Gold should find support at the $1,307-$1,308 level that has held over the last couple of sessions, and at the psychological $1,300 level below that.” — Reuters.
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