investing.com’s , 62.4% of traders expect the Federal Reserve to hike interest rates in June. Economists’ forecast that the Fed will leave its benchmark rate unchanged but investors are likely to parse through the Federal Reserve statement for any hints concerning a June rate hike.
Gold bounced back from a three-week low, as uncertainty regarding the tone of the Federal Reserve statement, due to be released on Wednesday, alongside an interest rate decision, capped losses.
Overnight, gold prices pared losses on Tuesday, benefiting from a weaker dollar, as investors’ appetite for riskier assets eased slightly ahead of the Federal Reserve’s interest rate decision on Wednesday.
Gold for June delivery on the Comex division of the New York Mercantile Exchange rose 0.05% to $1,257.64 a troy ounce.
Gold Prices Rise as Fed Expected to Keep Interest Rates Steady
As it stated in Gold Prices Rise as Fed Expected to Keep Interest Rates SteadyU.S. Federal Reserve Meeting Will Affect Gold PricesThe U.S. Federal Reserve will hold a two-day meeting, where interest rates will likely be held steady, leading to an increase in gold prices.
These strong numbers served to push gold prices down but, with the Fed meeting this week, starting on Wednesday, the market is anticipating that interest rates will remain static and, therefore, benefit gold prices.
While data coming from the United States is pointing to a strengthening economy, the U.S. Fed is still unlikely to raise its interest rates.
Higher interest rates would likely correlate with an increased demand for the Greenback, and therefore help bolster the dollar.
Gold prices often have an inverse relationship with the U.S. dollar.
Gold holds near 3-week low as Fed rate hike views lift dollar
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