Gold flat ahead of Fed meeting for direction on rate hikes

[BENGALURU] Gold was little changed on Monday (Jan 24), as investors awaited the US Federal Reserve's meeting for confirmation on its interest rate hike path, while concerns over inflation and Russia-Ukraine tensions keeping bullion's safe-haven allure intact.

Spot gold was flat at US$1,833.36 per ounce by 12.34 am GMT. US gold futures were up 0.2 per cent to US$1,834.70.

The Fed will tighten monetary policy at a much faster pace than thought a month ago to tame persistently high inflation, now viewed by economists polled by Reuters as the biggest threat to the US economy over the coming year.

The US central bank's Federal Open Market Committee is scheduled to meet on Jan 25-26.

Gold is generally seen as an inflationary hedge, but it is highly sensitive to rising US interest rates, which increases the opportunity cost of holding non-interest bearing bullion.

Benchmark US 10-year Treasury yields dropped on Friday, reducing the opportunity cost of holding non-interest bearing bullion.

Russia will face severe economic sanctions if it installs a puppet regime in Ukraine, a senior British minister said on Sunday after the UK accused the Kremlin of seeking to install a pro-Russian leader there.

Gold was sold at a discount in India last week, as a rise in domestic prices dulled demand and jewellers looked ahead to the country's annual budget, while the upcoming Chinese New Year spurred demand in other key Asian centres.

Spot silver was flat at US$24.23 an ounce. Palladium fell 0.3 per cent to US$2,101.56 and platinum was up 0.2 per cent to US$1,031.43.

REUTERS