Gold was up on Wednesday morning in Asia ahead of the U.S. Federal Reserve’s policy decision, due to be handed down later in the day. The focus will be on whether the Fed continues to maintain an accommodative approach to inflation and keep interest rates lower for longer, both policies announced at August’s Jackson Hole symposium by Fed Chairman Jerome Powell.
Gold futures edged up 0.11% to $1,968.30 by 12:35 AM ET (5:35 AM GMT) in Asian morning trade.
The dollar rose during the previous session after a recent weak spell, buoyed by expectations that today’s Federal Reserve meeting will pursue a policy of keeping interest rates low and controlling inflation. The greenback’s fall on Wednesday helped gold pull back some of its lost territory.
Other actors influencing the precious metal’s price include the U.S. Democrats pushing to delay the U.S. Congress’ October recess in order to establish a new COVID-19 aid bill and U.S. President Donald Trump declaring that a COVID-19 vaccine would be ready in a few weeks, though his pronouncement was received with a certain amount of skepticism.
A WTO ruling that the U.S. breached international trade regulations when applying tariffs to over $234 billion in Chinese goods has raised the possibility of increased U.S.-China trade tensions, bringing further hesitation into the global marketplace. The looming U.S. presidential election and its uncertain outcome are also matters of concern to investors.
Brent oil futures have climbed back to over $40 per barrel after a much larger U.S. crude inventory draw than forecast, this was after it earlier fell to its lowest price since June. However, both global oversupply and low global demand are still dogging the market, giving gold a slight boost.
COVID-19’s ongoing global spread is creating the usual currents of uncertainty in the market, though recent news on vaccine progression has slightly stilled the waters.
Gold, a safe-haven popular during times of social and economic uncertainty, has seen substantial price increases since the onset of the COVID-19 pandemic with prices topping out above $2,072 in August.