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Gold firms up ahead of Fed rate announcement

Published 12/14/2016, 04:54 AM
© Reuters.  Gold pushes higher ahead of Fed rate announcement
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Investing.com - Gold prices rose on Wednesday with the dollar little changed as investors awaited the outcome of the Federal Reserve’s latest policy meeting later in the day.

Gold was trading at $1,163.05 a troy ounce by 09:44 GMT, up 0.36% and holding above the lows of $1,153.00 set on Monday, the weakest since February 4.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 101.05, little changed for the day.

The Fed is widely expected to hike rates for the first time in a year, with investors pricing in a 100% chance of an increase, according to federal funds futures tracked Investing.com's Fed Rate Monitor Tool.

Investors will be focusing on the details of the central banks latest economic forecasts, the first since the U.S presidential election, for indications on the expected pace of rate hikes going forward.

Both a strong dollar and higher interest rates are typically bearish for gold, which is denominated in dollars and struggles to compete with yield-bearing assets when borrowing costs rise.

Elsewhere in precious metals trading, silver was at $17.11 an ounce after falling more than 1% in the previous session, while copper traded at $2.60 a pound.

Palladium was steady at $730.4 an ounce and platinum was at $939.25.

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