BENGALURU- Gold prices held steady on Wednesday and headed for a monthly gain, supported by rising optimism surrounding US interest rate cuts, while focus shifted to Federal Reserve’s policy verdict due later in the day.
Spot gold held its ground at $2,407.85 per ounce, and has gained more than 3 percent for the month. US gold futures edged 0.1 percent higher to $2,405.60.
At the conclusion of Fed’s two-day meeting later on Wednesday, expectations are that the US central bank will hold rates steady and policymakers will lay the groundwork for a September rate cut.
“The market wants to hear a confirmation that a September cut is on the cards and it will be the beginning of a policy easing cycle. Gold will rally if the Fed language indicates that multiple cuts are coming,” said Kyle Rodda, a financial market analyst at Capital.com.
The US rate futures market has fully priced in a 25-basis-point cut in September. Non-yielding bullion tends to thrive in a low interest rate environment.
Traders will also keep an eye on the ADP employment report due later in the day and Friday’s US payrolls report. Data on Tuesday showed that US job openings had dropped 46,000 to 8.184 million by the last day of June.
