Gold prices rise to two-week high

Bengaluru — Gold prices scaled two-week highs on Tuesday, with the dollar losing its grip on recent six-month highs heading into this week’s central bank meetings that kick off with the US Federal Reserve later in the day.

Spot gold was steady at $1,932.32 per ounce by 2.57am GMT, having hit its highest since September 5 earlier in the session.

US gold futures were flat at $1,953.90. The US dollar eased 0.1% against its rivals, making gold less expensive for overseas buyers, ahead of central bank policy decisions by the US, Britain and Japan over the week.

While the Fed is overwhelmingly expected to keep rates unchanged when it announces its policy decision on Wednesday, centre of attention would be on their outlook for futures rates.

“Fed chair Jerome Powell’s speech is likely to highlight that inflation risks have not gone away but they are in a wait-and-see mode for inflation,” said Michael Langford, CIO at Scorpion Minerals.

The low inventories of petrol and diesel globally forms a material risk in the short term to inflation targets, Langford said, adding that if inflation moves materially higher again, it would become more difficult to contain it.

Non-interest-bearing gold could see its appeal dim if the Fed further raises rates to control inflation. Fed officials, who have tentatively embraced the possibility they can squelch inflation without a recession, meet this week with an car workers’ strike, a possible federal government shutdown and a student loan squeeze on consumers posing new risks to that best-case outcome.

In other metals, spot silver fell 0.3% to $23.16 per ounce, platinum eased 0.4% to $929.49 and palladium jumped 0.8% to $1,246.21.