Gold steadied above $4,000 an ounce on Wednesday as dip buyers entered the market ahead of the Federal Reserve's interest-rate decision. Bullion held a 1.1% gain from the previous session after a selloff in AI-related stocks last week pushed the metal to its lowest since mid-July. Physical buyers and bargain hunters have helped arrest a more sustained decline, supported by Chinese households' growing appetite for bullion as prices softened and onshore equities lost their shine.
Near-term risks remain tilted to further consolidation, but the demand backdrop should provide a cushion once liquidation pressure fades. Christopher Wong, a strategist at Oversea-Chinese Banking Corp., noted that gold needs lower oil prices, softer inflation, and a lower US dollar and yields to regain durable upside momentum. The Fed is widely tipped to hold rates steady, which is supportive for gold, though traders are pricing in a hike before year-end.
Chair Kevin Warsh faces a tricky balancing act reassuring investors of the central bank's commitment to quashing inflation. The US Personal Consumption Expenditures price index, the Fed's preferred inflation gauge, should provide further clues on the central bank's rate policy for December. Spot gold rose 0.1% to $4,063.80 an ounce in Singapore.
Silver was little changed at $54.41 an ounce. Platinum was marginally lower, while palladium edged up. The Bloomberg Dollar Spot Index gained slightly after adding 0.3% on Tuesday.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing