© Reuters.
Investing.com – It appears that gold and the dollar fell into a stalemate trap, amid very limited movements during trading today, Wednesday, with markets anticipating this evening regarding…
Amid market expectations of a 25-point rate hike, markets are still afraid of surprises at the last minute, as the focus is currently on Federal Reserve Chairman Jerome Powell’s statements following the issuance of the decision.
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gold now
The futures contracts for the yellow metal decreased during these moments of today’s trading, slightly within the range of two dollars, down to levels near $ 1943 an ounce, down 0.1%.
While the spot gold contracts fell in the range of $ 1.5 to levels of 1926 dollars an ounce during these moments of trading today, Wednesday, down 0.1%.
Gold moves within a narrow price range, as investors refrain from making any big bets ahead of the monetary policy decision of the US Federal Reserve.
dollar now
On the other hand, the dollar tends to decline slightly during these moments of trading today, Wednesday, while it is still hovering near its lowest level in 8 months.
The main decline against a basket of major currencies today, Wednesday, by less than 0.1%, down to levels near the 102 points, and it fluctuates between the levels of 102 points and the levels of 102.2 points.
Meanwhile, the yield on the US 10-year bond decreased by 0.022 points, to 3.84%.
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What happened?
It rose at the end of trading yesterday, Tuesday, with the decline of the US currency, to achieve gains for the third month in a row.
The price of gold futures contracts increased by 0.4%, equivalent to $6.10, to reach $1945.3 an ounce, and the spot delivery price of the yellow metal rose by 0.3%, to record $1929.30 an ounce.
Gold prices achieved monthly gains of about 6.9%, equivalent to approximately $125, during January 2023, while the dollar index, which monitors the performance of the US currency, fell against 6 major currencies.
US interest rates
Traders mostly expect the Fed to taper its interest rate hike to 25bp, after the US central bank slowed its hawkish pace to 50bp in December after 4 consecutive hikes of 75bp.
“Gold prices are trading in a range ahead of the Fed meeting, as the gold market has already priced in a 25 basis point hike,” said Director at Kedia Commodities, Ajay Kedia.
A manager at Kidia Commodities added: “If the Fed uses a dovish tone, that would be positive for gold,” according to Reuters.
gold forecast
Matt Simpson, chief market analyst at City Index, said that gold will remain above $1,900 before the board meeting, and the board’s message must be heard to know the potential direction of the metal later.
“I expect gold prices to trade between $1,900 and $1,925 over the next week,” said Michael Langford, director of corporate advisory firm AirGuide.
Official data showed that economic activity in China, the largest consumer of gold, returned to growth in January, as a wave of Corona infections passed faster than expected in the wake of the country’s dismantling to control the epidemic.
The director of the corporate consulting company added: “With the recovery of the Chinese economy, the actual demand for gold in China will improve, and there will also be support for other precious metals of an industrial nature.”
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