Gold performed slightly better in Wednesday’s early trades as the dollar dithered in the said period. Investors were also being cautious as the statement from a two-day Federal Reserve meeting in the United States is set to be released soon.
Spot gold experienced a rise at about 0.2 per cent to $1,313.50 an ounce on the on Wednesday as the US gold futures for December delivery soared by 0.5 per cent at $1,317.40 an ounce.
"Donald Trump's comments overnight in regards to North Korea have certainly added a bid to the precious complex, but all in all very quiet ahead of the (Fed statement)," a trader told reports.
On Tuesday, The US President, Donald Trump, worsened his altercation with North Korea across its nuclear encounter, sending intimidation that’ll "totally destroy" the country and making a mockery of its leader, Kim Jong Un calling him as a "rocket man".
The mentioned Geopolitical tension naturally can revitalize the demand for such as gold and the Japanese yen.
As for the dollar, the greenback was positioned lower counter to a range of currencies in Wednesday’s early trades. More so, Asian stocks had slightly moved ahead of the Fed's monetary policy publication far ahead in the said period.
The US Fed is also expected to reveal its balance sheet reduction plans and give out its viewpoint for potential interest hikes for the upcoming periods of the current year,
"We suspect that the central bank will reiterate its dovish stance and likely weaken the dollar in the process," analyst Edward Meir expressed in a statement. "We could see a modest bounce in gold over the next day or two, but nothing that will take the precious metal outside of a relatively tight trading range for the time being,"
"The majority of the consensus is saying that there will be one more hike this year, and if that remains the case, gold should still remain reasonably well supported with what's happening geopolitically," the source told reports. “I think $1,300, $1,290 is certainly a good base for gold unless the Fed changes its wording with regards to how many hikes there will be in the coming months," the trader said.
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