Gold shines with lower dollar ahead of US interest rate decision

Gold prices rose today, Wednesday, supported by the decline in the dollar, as slowing inflation in the United States increased bets that the Federal Reserve (the US central bank) will keep interest rates unchanged during its meeting later in the day.

According to Reuters, gold rose in spot transactions by 0.3 percent to $1948.49 an ounce by 0500 GMT. US gold futures rose 0.2 percent to $1,961.70.

The US dollar fell, making the yellow metal, which is priced in the greenback, more attractive to buyers holding other currencies.

The US consumer price index rose 4 percent in May, its smallest annual increase in more than two years, but well above the US central bank’s target of a 2 percent increase.

On Tuesday, Federal Reserve officials began their first meeting in 15 months without a predetermined interest rate hike on the table, making it the first meeting without a foreseeable outcome.

Markets now almost 90 percent expect the Federal Reserve to keep interest rates unchanged, according to CME’s VideoWatch tool.

As for other precious metals, silver increased in spot transactions by 0.7 percent to $23.8439 an ounce, and platinum rose 0.3 percent to $979.37, while palladium settled at $1,361.01.