Gold Range Holds Tight Ahead of Fed Meeting

Tuesday, in anticipation of a U.S. Federal Reserve meeting that is expected to result in an interest rate hike, investors refrained from placing major bets on gold prices, holding the price of the precious metal within a limited range.

Spot gold jumped 0.2% to $1,679.14 per ounce around 20:11 EST, while gold futures climbed 0.6% to $1,687.85 per ounce (00:11 GMT). Following a week of dramatic drops, neither instrument has seen notable movement since Monday.

As the U.S. dollar fell on Tuesday, there was a slight lessening of pressure on gold. The dollar stayed at 20-year highs, whilst U.S. Treasury rates soared before the Fed's announcement of interest rate changes.

On Wednesday, it is widely expected that the central bank would increase interest rates by 75 basis points bps, while traders are also considering the possibility of a 100 basis point increase. In August, U.S. inflation remained at 40-year highs, bolstering expectations for a hefty Fed rate hike. The data led to a strengthening of the dollar and a continuation of losses on the metal markets.

The yellow metal is now trading lower for the year as a result of the Federal Reserve's rate rises. Beginning of the Russia-Ukraine conflict coincided with gold's price peak. Recently, gold prices fell below $1,700, which was seen as one of the last remaining points of support before a steeper decline.

Tuesday saw both platinum and silver futures recover from recent losses and advance.

Copper prices for industrial metals climbed by 0.2% to $3.5323 per pound. Recently, though, the dollar has pushed pressure on red metal.

In spite of expected supply shortages due to a strike at the Escondida copper mine in Chile, the outlook for copper prices this year is clouded by signs of a global slowdown in economic growth.