© Reuters. Gold prices stabilize near 1775 dollars before the US Federal Reserve meeting
Arabictrader.com – It stabilized during the beginning of trading today, Wednesday, around the levels of 1775 dollars an ounce. With the markets awaiting the US Federal Reserve’s decisions this evening, amid a state of uncertainty that dominates the markets between positive expectations towards the trend, and financial institutions reducing global growth expectations on the other hand.
It rose for the second day in a row, as US Treasury and yields tried to recover from the ongoing pressure due to the debt crisis at Evergrande, which is the largest real estate developer in China.
It is reported that shares rebounded strongly in early trade before turning volatile, due to speculation over whether Evergrande Group will be able to pay $83 million in interest on bond loans on Friday. With the ongoing debt crisis of the Chinese Evergrande Group, risk appetite in the markets is negatively affected, and thus contributes to supporting little demand for safe havens, including gold.
Uncertainty over the outcome of the two-day policy meeting that ends with Wednesday’s press conference, by Federal Reserve Governor Jerome Powell, also kept risks in check.
The FOMC meeting may reconsider the issue of tapering the monetary stimulus program, which has boosted stock prices over the past 18 months. The US Federal Reserve has been buying $120 billion in bonds and other assets since the COVID-19 outbreak in March 2020 to support the economy. It also keeps interest rates near zero levels.
The movement of gold and the dollar
Intraday at 10:21 GMT, futures are trading slightly higher. Spot gold is rising 0.10%, or $1.70, at $1,776 an ounce.
On the other hand, the US dollar is trading stable near the level of 93.20 points, benefiting from the positive expectations of the US Federal Reserve meeting in the absence of important economic data during the rest of the day. It is reported that the rise of the dollar pushes gold prices to decline, and vice versa. Consequently, the positivity of the expected events may contribute to the continued strengthening of the dollar’s rise, and thus pressure on gold prices.
Among the prices of other metals, metal contracts rose by 0.38% and recorded about $22.698 an ounce. Platinum contracts rose 1.57% and recorded about $965.85 an ounce. At the same time, metal contracts rose by 3.11% and recorded about $1,953.50 an ounce.
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