Gold edges down as dollar, yields rise ahead of Fed rate decision, Warsh remarks
GLD•Gold edges lower ahead of Fed decision
Gold edged lower on Wednesday, pressured by a firm dollar and elevated U.S. Treasury yields, while investors awaited the U.S. Federal Reserve's interest-rate decision and remarks from Chair Kevin Warsh later in the day for clues on its policy path.
Spot gold XAU= fell 0.2% to $4,020.69 per ounce by 0849 EDT (1121 GMT), while U.S. gold futures GCcv1 for August delivery lost 0.4% to $4,019.40.
Yields on the benchmark 10-year U.S. Treasury note US10YT=RR drifted higher. The U.S. dollar firmed, making bullion more expensive for overseas buyers.
"The stronger U.S. dollar index and the slight uptick in Treasury yields are negative forces," said Jim Wyckoff, a market analyst at American Gold Exchange. "But mostly, the gold and silver markets are treading water ahead of this afternoon's FOMC decision and press conference from Chairman Warsh."
Traders await Fed, inflation data and central bank guidance
The Fed's policy-setting committee is due to announce its decision at 2 p.m. EDT (1800 GMT). Warsh is scheduled to hold a press conference beginning half an hour later.
About 64% of traders expect policymakers to hold interest rates steady in today's meeting, while they are pricing in about an 80% chance of a U.S. rate hike in September, according to CME Group's FedWatch tool.
Meanwhile, oil prices rose more than 4% as tensions in the Middle East escalated following U.S. and Saudi strikes in Iraq and an intercepted Iranian missile attack on U.S. forces.
Elevated energy prices due to Gulf supply disruptions have been weighing on gold prices as they raised expectations of higher-for-longer interest rates, which tend to diminish the appeal of non-yielding gold.
Investors also await the U.S. Personal Consumption Expenditures data for June, the Fed's preferred inflation gauge, due on Thursday, for further cues on monetary policy.
