Gold Keeps to a Tight Range as Fed Meeting Looms

By Ambar Warrick 

Investing.com-- Gold prices rose slightly on Tuesday but kept to a tight range seen this week as investors held off from making big bets ahead of a U.S. Federal Reserve meeting that is expected to result in an interest rate hike.

Spot gold rose 0.2% to $1,679.14 an ounce, while gold futures rose 0.6% to $1,687.85 an ounce by 20:11 ET (00:11 GMT). Both instruments have marked muted moves since Monday after logging steep losses last week.

Pressure on gold eased slightly on Tuesday as the U.S. dollar edged lower. But the greenback stayed pinned near 20-year highs, while U.S. Treasury yields rose, ahead of an interest rate decision by the Fed. 

The central bank is widely expected to raise rates by 75 basis points bps on Wednesday, although traders are also pricing in the possibility of a surprise 100 bps hike. Expectations for a sharp hike by the Fed were cemented after data last week showed U.S. inflation stuck to near 40-year highs in August. The reading had boosted the dollar and spurred extended losses in metal markets.

A series of rate hikes by the Fed has dragged gold off highs hit during the onset of the Russia-Ukraine war, with the yellow metal now trading lower for the year. Gold prices recently fell below the $1,700 level, which was seen as one of the last points of support before a steeper decline.

Other precious metals also rose on Tuesday, with platinum and silver futures both recovering from recent losses.

Among industrial metals, copper prices rose 0.2% to $3.5323 a pound. But the red metal was also reeling under recent pressure from the U.S. dollar.

Signs of weakening economic growth across the world have dimmed the outlook for copper prices this year, despite expected supply disruptions from a strike in Chile copper mine Escondida.