Gold prices edged higher Wednesday, as investors awaited the conclusion of the Federal Reserve's monetary-policy meeting later in the day.
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.
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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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(END) Dow Jones Newswires
September 20, 2017 11:29 ET (15:29 GMT)