Latest News

Forex News

Click Here to read Forex News

Market News

Click Here to read Market News

PRECIOUS-Gold gains as dollar retreats ahead of Fed policy statement
Published at 21/09/2021 at 14:19

* Stocks attempt rebound from Evergrande-led sell-off

* Firmer gold price likely if selling resumes, analyst says

* Federal Reserve concludes two-day meeting on Wednesday

(Updates prices)

By Arundhati Sarkar

Sept 21 (Reuters) - Gold rose on Tuesday, helped by a weaker dollar, while investors were focused on the start of a two-day Federal Reserve policy meeting that could provide clues on the timeline for tapering of the central bank's support for the U.S. economy.

Spot gold was up 0.5% at $1,772.96 per ounce by 1255 GMT, while U.S. gold futures were up 0.5% to $1,772.50.

"The big question that needs to be answered is will the current market uncertainty change any prospective timeline that the Fed might have when it comes to announcing its tapering of asset purchases," said Michael Hewson, chief market analyst at CMC Markets UK.

That, more than anything, is likely to put downward pressure on gold, Hewson added.

The Fed will release a policy statement and new economic projections at the end of its policy meeting on Wednesday. Some analysts believe it could announce the start of the tapering of its asset purchases in the fourth quarter, pushing gold lower.

Reduced central bank stimulus and interest rate hikes tend to lift bond yields, raising the opportunity cost of holding non-interest bearing gold. It would also help boost the dollar, further weighing on bullion.

Offering some respite to gold, the U.S. dollar slipped 0.2% after hitting near a one-month peak in the previous session.

World stocks stabilised and investors grew more confident that contagion from debt-laden Chinese developer Evergrande would be limited.

Fawad Razaqzada, analyst with ThinkMarkets, also said, with uncertainty over the stock markets remaining elevated despite Tuesday's rebound, it is not unreasonable to expect some safe-haven flows into gold "amid risk of contagion from the debt crisis."

However, the gains have so far been very limited, he added.

Silver rose 1.4% to $22.56 per ounce, platinum climbed 2.5% to $933.8, and palladium gained 2% to $1,924.03.

(Reporting by Arundhati Sarkar in Bengaluru; editing by Mark Potter, Jason Neely and Paul Simao)

((;; +1 646 223 8780 Ext: 2776))