Gold edges down as investors cautiously eye Fed verdict

[BENGALURU] Gold prices inched lower on Wednesday (Nov 3) as investors awaited the result of a US Federal Reserve policy meeting to assess how the central bank plans to combat rising inflation and ease worries about economic recovery.

Spot gold fell 0.2 per cent to US$1,784.04 per ounce by 1.38 am GMT. US gold futures dropped 0.2 per cent to US$1,785.30.

The Fed is expected to announce its stimulus tapering timeline at 2 pm GMT on Wednesday. It is likely to begin paring its monthly asset purchases by US$15 billion each month until ending them by mid-2022.

Reduced stimulus and interest rate hikes tend to push government bond yields up, raising the opportunity cost of gold, which pays no interest.

The end of Britain's furlough programme has not led to a surge in new job-seekers, according to data that suggests unemployment is unlikely to rise sharply and could bolster the case for a Bank of England interest rate hike.

Japanese policymakers on Tuesday (Nov 2) reaffirmed the Bank of Japan's commitment to its 2 per cent inflation target in a meeting held between the central bank chief and the country's economy and finance ministers.

Activity in China's services sector expanded at a faster pace in October, buoyed by robust demand, although rising inflationary pressures weighed on business confidence for the year ahead, a private survey showed on Wednesday.

Spot silver fell 0.2 per cent to US$23.46 per ounce. Platinum was little changed at US$1,037.49, while palladium gained 0.4 per cent to US$2,019.81.

REUTERS