Gold prices flat as investors await Fed rate decision

Tuesday,   31-Jan-2023   08:19 AM (IST)

Gold prices were flat on Tuesday, as market participants held back from making large bets ahead of the U.S. Federal Reserve policy decision. Spot gold held its ground at $1,922.26 per ounce, as of 0032 GMT. U.S. gold futures were down 0.1% at $1,921.40. Traders mostly expect the U.S. central bank to scale back rate hikes to 25 basis points (bps) at its two-day policy meeting that ends on Wednesday. Low interest-rate environment decreases the opportunity cost of holding non-yielding bullion. Investors are pricing in a 50-bps rate hike from the Bank of England (BoE) and the European Central Bank (ECB), which also have policy meetings this week. SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.2% to 917.05 tonnes on Monday. China’s fiscal revenue rose 0.6% in 2022 from a year earlier, slowing sharply from a 10.7% increase in 2021 due to huge tax rebates for businesses to support the COVID-ravaged economy, data from the finance ministry showed on Monday. Spot silver lost 0.2% to $23.56 per ounce, platinum was steady at $1,009.04, and palladium dipped 0.2% to $1,635.48.