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Gold futures traded lower on Wednesday, one day after the yellow metal posted its third-straight monthly gain, as investors waited to hear from Federal Reserve Chairman Jerome Powell.
Price action
-
Gold prices for April delivery
GC00,
-0.14% GCJ23,
-0.14%
fell $3.10, or 0.2%, at $1,942.20 an ounce on Comex after trading as high as $1,949. -
Silver for March delivery
SI00,
-0.80% SIH23,
-0.80%
fell by 20.6 cents, or 0.9%, to $23.63 per ounce. -
March palladium
PAH23,
+1.56%
climbed $31.20, or 1.9%, to $1,679.50 per ounce, while platinum for April
PLJ23,
-1.08%
declined by $7.30, or 0.7%, to $1,013 per ounce. -
Copper for March
HGH23,
-2.06%
fell by 7.8 cents, or 1.8%, to $4.1485 per pound.
Market drivers
After a strong start to the year, the rally in gold prices has stalled in the mid-$1,900s, but Wednesday’s Fed decision could spark another leg higher, or an abrupt turnaround, depending on what Chairman Jerome Powell says during the press conference and question and answer session.
The Fed rate move itself has long since been priced in, with a 25-basis point hike broadly expected, but attention will be on the statement released alongside the announcement, as well as Powell’s comments that follow it, said Rupert Rowling, market analyst at Kinesis Money.
The Fed delivered a 50 basis point hike at its December meeting.
Read: Fed set to deliver quarter-point rate hike along with ‘one last hawkish sting in the tail’
Also see: 4 ways Powell could tell markets the Fed isn’t ready to pivot
A 25 basis point hike would be “the smallest hike since the Fed started increasing rates in the second quarter of last year and will be the latest indicator that the U.S. central bank feels its aggressive policy has yielded the result it was designed to do, with inflation now on a downward trajectory,” said Rowling, in market commentary.
For gold investors, “the key will be how many more rate hikes are likely in this current cycle with the precious metal’s lack of yield making it less attractive during times of high interest rates compared with other interest-bearing asset classes,” he said.
Read: Gold in 2022 saw its strongest annual demand in more than a decade, report finds
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