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.
Gold futures 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 U.S. dollar index 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, silver futures gained 0.28% to $16.230 a troy ounce, while platinum futures slipped 0.01% to $945.20 an ounce.