Gold flat as investors focus on Fed rate verdict
Fed interest rate decision due at 1800 GMT
Markets see 63% chance of 50-bp rate cut
Updates prices and graphics
By Daksh Grover
Sept 18 (Reuters) -Gold prices held their ground on Wednesday as investors weighed the chances of an outsized interest rate cut by the U.S. Federal Reserve later in the day.
Spot gold XAU= was little changed at $2,569.74 per ounce, as of 0732 GMT. Bullion rose to a record high of $2,589.59 on Monday.
U.S. gold futures GCcv1 rose 0.1% to $2,596.00.
The Fed is expected to announce a rate reduction for the first time in more than four years at 1800 GMT. Chair Jerome Powell will hold a press conference afterwards.
Markets are pricing in a 63%chance of a 50-basis-point (bp) cut, up from 34% a week earlier, according to the CME FedWatch tool. FEDWATCH
There's a real risk that market expectations are too optimistic about the Fed making a 50-basis-point cut, said Matt Simpson, senior analyst at City Index, adding that in case of a smaller reduction yields and the dollar could rise significantly, weighing on gold.
If the Fed delivers a 25-bp cut and guides expectations for another 25-bp reduction going forward, gold could dip back beneath the $2,570 level, Simpson said.
Zero-yield bullion tends to be a preferred investment in a lower interest rate environment and during geopolitical turmoil.
Meanwhile, data released on Tuesday showed that U.S. retail sales unexpectedly rose 0.1% in August, suggesting that the economy remained on solid footing through much of the third quarter.
Heightening tensions in the Middle East, the militant group Hezbollah promised to retaliate against Israel, accusing it of triggering explosions in Lebanon on Tuesday that killed nine and injured nearly 3,000.
On the physical front, India's August gold imports stood at $10.06 billion, compared with $3.13 billion in July, according to the trade ministry.
Among other metals, spot silver XAG= fell 0.5% to $30.57 per ounce, platinum XPT= edged 0.2% higher to $983.05 and palladium XPD= gained 0.2% to $1,118.25.
Spot gold price in USD per oz https://reut.rs/3ZpNPSB
Reporting by Daksh Grover in Bengaluru; Editing by Subhranshu Sahu, Sonia Cheema and Eileen Soreng
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
