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Gold prices rose to their highest level in two weeks on Tuesday as the dollar fell from its highest level in six months before the start of the Federal Reserve’s monetary policy meeting later on Tuesday, and with markets awaiting a new set of economic forecasts from the US central bank.
According to Reuters, gold prices stabilized in spot transactions at $1,933.31 per ounce, after reaching their highest level since September 5 earlier in the session. US gold futures prices rose 0.1% to $1,955 per ounce.
Edward Gardner, a commodities economist at Capital Economics, said: “Any expectations from the Federal Reserve that it will raise interest rates by more than what investors had bet on before could have the effect of pushing gold prices down.”
The speed of growth, declining inflation, and the strength of the labor market paved the way for updated expectations from Federal Reserve officials that will likely reflect their increasing belief in the possibilities of a soft landing for the economy while keeping another possible hike in interest rates on the table.
The dollar hovered below the highest level in six months that it recorded last week, which makes gold cheaper for buyers from abroad while awaiting the decisions of the Bank of England and the Bank of Japan regarding monetary policy this week.
Michael Langford, chief investment officer at Scorpion Minerals, said: “Federal Reserve Chairman (Jerome) Powell’s speech will likely highlight that inflation risks have not passed, but they are in a wait-and-see mode regarding inflation.”
As for other precious metals, silver rose in spot transactions by 0.3% to $23.31 per ounce. Platinum rose 0.6% to 938.97%. Palladium increased 1 percent to $1,248.60.