Gold Up, but Moves Small as Investors Look to Fed Policy Decision

  • Commodities News
Gold Up, but Moves Small as Investors Look to Fed Policy Decision
Credit: © Reuters.

By Gina Lee – Gold was up on Tuesday morning in Asia, but remained little changed. Investors look to the U.S. Federal Reserve's latest policy decision for clues on interest rate hikes, while concerns about the geopolitical tension in Eastern Europe boosted the safe-haven yellow metal.

Gold futures inched up 0.01% to $1,841.80 by 10:50 PM ET (3:50 AM GMT).

U.S.-Russia tensions over Ukraine continued, with the U.S. putting as many as 8,500 troops on heightened alert. The U.K. also said it was withdrawing some staff and dependents from its embassy in Ukraine, a day after the U.S. said it was ordering diplomats' family members from its own embassy to leave the country.

U.S. shares ended on an upward note after a volatile session on Monday. The steep sell-off later in the session, and the ensuing bargain hunting, pushed the indexes into positive territory. Benchmark U.S. 10-year Treasury yields tumbled to a one-week low on Monday.

Investors’ focus is now on the Fed policy decision, due to be handed down on Wednesday after a two-day meeting. It is widely expected that the U.S. central bank will indicate that it plans to hike interest rates by 25 basis points in March 2022.

The Bank of Canada will hand down its own policy decision on the same day as the Fed, while the South African Reserve Bank will hand down its policy decision on Thursday.

Meanwhile, the Republic of Sudan will bolster its use of gold exports to cover imports of essential goods. The country is embarking on a new 2022 budget without foreign aid amid an economic downturn following a coup.

In other precious metals, silver fell 0.8%, palladium was down 0.6% and platinum fell 0.7%.

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