Gold prices traded higher on Wednesday as Treasury yields slipped and the dollar weakened. Investors around the world were eagerly awaiting the conclusion of the Federal Reserve's July policy meeting, where Chairman Jerome Powell is expected to make a statement.
Price Action
- Gold futures for August delivery gained $10.70, or 0.5%, reaching $1,974 per ounce on Comex.
- Silver futures for September delivery increased by 4 cents, or 0.2%, totaling $24.87 per ounce.
- Platinum in October declined by $5.80, or 0.6%, to $970.80 per ounce, while September's palladium fell by $7.20, or 0.6%, to $1,274 per ounce.
- Copper in September fell by 2 cents, or 0.6%, to $3.89 per pound.
Market Drivers
Investors are eager to learn more about the Fed's plans for monetary policy, with expectations of a 25 basis point increase in the policy interest rate after no change in June. Warren Patterson, head of commodities strategy at ING, noted that the markets will be watching closely for any signals indicating if this rate hike will be the last or if there will be more to come.
As the first of a series of policy announcements from major global central banks this week, the Fed meeting sets the stage for future market movements. The European Central Bank and Bank of Japan are also expected to make important announcements.
The reaction of the U.S. dollar will likely drive any movement in gold prices following the Fed's decision. A weaker dollar has recently been beneficial for gold prices, making the yellow metal more affordable for international buyers since it is typically priced in dollars.
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