Gold prices rise on weaker dollar and Fed meeting expectations

Gold prices rose on Wednesday, supported by a weaker dollar, as slowing inflation in the United States boosted bets that the US Federal Reserve will keep interest rates unchanged when it meets later in the day.

And gold in instant transactions increased 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 weakened, making the greenback-priced metal 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 2 percent target.

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 expect about 90 percent of the Fed 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.