Gold edges higher as investors await big Fed rate hike move

GOLD prices inched up from a near 1-month low on Wednesday (Jun 15), as investors awaited a potentially aggressive and key interest rate hike announcement from the US Federal Reserve as it seeks to combat inflation amid mounting fears of an impending recession.

Spot gold was up 0.1 per cent at US$1,810.59 per ounce as of 12.51 am GMT, after dropping to its lowest since May 16 at US$1,803.90 on Tuesday. US gold futures fell 0.1 per cent to US$1,811.30.

Investors have dramatically raised their bets that the Fed will raise interest rates by 75 basis points (bps) rather than 50 bps later in the day, a swing in expectations which has fuelled a violent selloff across world markets.

Rising short-term US interest rates and bond yields increase the opportunity cost of holding bullion, which yields no interest.

Benchmark US 10-year Treasury yields edged off a multi-year peak, providing some support to gold.

World stocks extended losses on Tuesday, while the dollar clung to multi-year highs, as surging inflation led investors to brace for what could be the largest US interest rate hike in 28 years.

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Gold holds near 4-week low on elevated dollar

A stronger dollar makes greenback-priced bullion more expensive for buyers holding other currencies.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.46 per cent to 1,063.94 tonnes on Tuesday from 1,068.87 tonnes on Monday.

Spot silver dipped 0.1 per cent to US$21.06 per ounce, while platinum gained 0.3 per cent to US$921.84, and palladium firmed 0.3 per cent to US$1,820.35. REUTERS