Gold prices steady with market focus on US Federal Reserve rate decision

GOLD prices held steady above the key US$2,000 level on Wednesday (May 3), while investors strapped in for the US Federal Reserve’s interest rate-hike verdict due later in the day.

Spot gold held its ground at US$2,015.25 per ounce by 0021 GMT. US gold futures were flat at US$2,023.70.

Prices rose more than 1 per cent in the previous session as yields dropped on renewed fears of contagion in the US banking sector.

Fed’s rate decision is due at 1800 GMT. The US central bank is widely expected to raise interest rates by 25 basis points.

Bullion is known as a hedge against inflation and economic turbulence, but higher rates tend to diminish demand for the zero-yielding asset.

Analysts expect gold prices to hover around US$1,950 an ounce in the coming months, keeping close to all-time highs as central banks stop raising interest rates, a Reuters poll showed.

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Gold steady as traders await US Federal Reserve meeting

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Spot silver was down 0.2 per cent at US$25.35 per ounce, platinum fell 0.4 per cent to US$1,061.31 while palladium edged 0.6 per cent higher to US$1,437.91. REUTERS