Gold flat in cautious trade ahead of Fed decision

[BENGALURU] Gold prices were flat on Wednesday (Mar 16), holding near a 2-week low hit in the previous session, as investors refrained from making big bets ahead of a widely expected interest rate hike decision from the Federal Reserve to contain surging inflation.

Spot gold was little changed at US$1,920.71 per ounce by 12.53 am GMT, after touching its lowest since Mar 1 at US$1,906 in the last session. US gold futures fell 0.3 per cent to US$1,923.90.

US Treasury yields rose to their highest in more than two-and-a-half years on Tuesday, ahead of an expected Fed announcement on Wednesday of its first interest rates hike in 3 years.

Gold is highly sensitive to rising US interest rates, which increase the opportunity cost of holding non-yielding bullion.

US President Joe Biden will make his first visit to Europe since the invasion of Ukraine to discuss the crisis with Nato allies next week, the White House said on Tuesday, as the refugee tally hit 3 million amid more Russian air strikes.

The Russian central bank said it would suspend the buying of gold from banks from Tuesday to meet increased demand for the metal from households, its latest attempt to weather the storm on Russian markets in the face of Western sanctions.

Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 0.2 per cent to 1,061.8 tonnes on Tuesday.

Palladium, used by automakers in catalytic converters to curb emissions, rose 0.5 per cent to US$2,436.98 per ounce but held close to a more than 2-week low hit on Monday over receding supply fears.

Spot silver was up 0.2 per cent to US$24.91 per ounce, while platinum was up 0.1 per cent to US$986.82. REUTERS