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MTECHTIPS:- Gold off 1-month lows but gains capped before Fed rate decision

MTECHTIPS:- Gold off 1-month lows but gains capped before Fed rate decision

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Gold prices pushed higher on Wednesday, pulling away from the previous week’s one-month low but gains were held in check ahead of the Federal Reserve’s decision on U.S. interest rates. U.S. gold futures for December delivery were up 0.49% to $1,108.00 an ounce. On Friday gold fell to a one-month trough of $1,098.20 and has remained in a narrow range this week as traders stuck to the sidelines ahead of the Fed decision. Investors were looking ahead to the outcome of the Fed’s two-day policy setting meeting which was beginning later in the day amid uncertainty over whether the central bank would hike short term interest rates for the first time in almost a decade on Thursday. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, edged up 0.12% to 95.87 in rangebound trade. An increase in interest rates would boost the greenback by making it more attractive to yield-seeking investors, while weighing on gold. Market participants were looking ahead to the latest report on U.S. consumer inflation later Wednesday. Recent U.S. data has indicated that inflation is still weak, due to low oil prices and the stronger dollar, even as the labor market staged a strong recovery and the economy posted five consecutive quarters of growth. Fed Chair Janet Yellen has said that an interest rate increase is data dependent but has also indicated that she expects to begin raising rates before the end of the year.



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