Gold Prices Gain as Dollar Declines Ahead of Fed Meeting

Investing.com – Gold prices traded higher on Wednesday on a softer dollar as investors await the U.S. Federal Reserve’s meeting for signs of the number of rate hikes this year.

for April delivery on the Comex division of the New York Mercantile Exchange gained $2.10, or 0.16%, to $1,314.00 a troy ounce by 2:29am ET (06:29 GMT).

The expectations for a faster pace of US rate hikes has caused the precious metal to fall 4% from a one-and-a-half year high reached in January. Higher US interest rates reduces demand for non-interest-bearing bullion.

The that tracks the greenback against a basket of six major currencies last stood at 89.89, down 0.13%.

Dollar-denominated assets such as gold are sensitive to moves in the dollar – A fall in the dollar makes gold cheaper for holders of foreign currency and thus, increases demand for the precious metal

While the Fed is poised to raise interest rates this week, most Asian central banks are unlikely the follow suit, according to reports. China and Japan see little reason for rate hikes, and the minutes from the Reserve Bank of Australia indicated that the Bank does not intend to change its policy.

In other precious metal trade, gained 0.28% to $16.230 a troy ounce, while slipped 0.01% to $945.20 an ounce.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.