Metals: Gold Prices Rise as Investors Await Fed

By Ira Iosebashvili Features Dow Jones Newswires

Gold prices edged higher Wednesday, as investors awaited the conclusion of the Federal Reserve's monetary-policy meeting later in the day.

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Gold for December delivery was recently up 0.4%, at $1,316.30 a troy ounce, on the Comex division of the New York Mercantile Exchange.

While the Fed is expected to leave interest rates unchanged, many investors will focus on details of how the central bank plans to unwind its $4.5 trillion balance sheet in the months ahead, as well as its views on inflation.

A string of weak inflation readings earlier this year dampened expectations that the Fed would raise rates for a third time this year in December, but some investors and analysts said last week's stronger-than-expected consumer-price data could make the central bank move more aggressively in normalizing monetary policy. Expectations of a more hawkish Fed would weigh on gold, which struggles to compete with yield-bearing investments when rates rise.

At the same time, a weaker dollar and simmering geopolitical tensions could help keep gold prices elevated in the months ahead, analysts at Citigroup said in a note to clients. Their most likely scenario envisions gold prices reaching $1,375 a troy ounce in the next three months, before drifting lower in the next year. A serious boost in geopolitical or economic tensions, such as a war between the U.S. and North Korea or a U.S. market correction, would take prices to around $1,475 a troy ounce, the report said.

In base metals, copper for December delivery was recently down 0.2%, to $2.9645 a pound.

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Write to Ira Iosebashvili at ira.iosebashvili@wsj.com

(END) Dow Jones Newswires

September 20, 2017 11:29 ET (15:29 GMT)