By Ashitha Shivaprasad
(Reuters) – Gold traded in a tight range on Wednesday as investors awaited the U.S. Federal Reserve’s meeting next week to assess the central bank’s monetary policy stance.
Spot gold was little changed at $1,772.00 per ounce, as of 0650 GMT. U.S. gold futures rose 0.1% to $1,783.90.
Fed fund futures are now pricing in a 91% chance of 50-basis point (bps) rate increase in the December meeting.
“The key influence on the gold price is dollar sentiment. Next week’s FOMC (Federal Open Market Committee) meeting will determine the ultimate direction of this sentiment,” said Michael Langford, director at corporate advisory firm AirGuide.
A stronger dollar makes bullion less appealing to overseas buyers. The dollar index was up 0.2%.
“Gold in the next few trading sessions has more downside risk than upside, prior to the FOMC meeting,” Langford said.
The November Consumer Price Index (CPI) data will be released on Dec. 13 and final Fed meeting of 2022 is scheduled on Dec. 13-14.
High interest rates have weighed on gold’s traditional status as a hedge against inflation and other uncertainties this year, as they increase the opportunity cost of holding non-yielding bullion.
Spot gold may break a support at $1,766 per ounce and fall into $1,748-$1,755 range, as a bounce triggered by this support has completed, according to Reuters technical analyst Wang Tao.
Graphic: xau https://fingfx.thomsonreuters.com/gfx/ce/zdpxdomekpx/Pasted%20image%201670383856335.png
Spot silver edged 0.7% higher to $22.31.
Platinum was down 0.3% at $986.15 and palladium rose 1.2% to $1,871.00.
“We see platinum outperforming palladium as demand for the precious metal is boosted from both jewellery and industrial sectors. Further, normalising of the supply chain should see growth in auto catalyst demand,” said ANZ in a note.
(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Subhranshu Sahu, Uttaresh.V and Vinay Dwivedi)
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