An Argor-Heraeus SA branded two hundred and fifty gram gold bar, center, sits in this arranged photograph at Solar Capital Gold
Akos Stiller | Bloomberg | Getty Images
Spot gold was down 0.2% to $1,846.06 per ounce. U.S. gold futures eased 0.3% to $1,844.90.
“To drive gold towards the upper end of the (narrow) range, (the Fed) will need to adopt a fairly dovish tone, which will push U.S. 10-year yields back below 1% – that will help gold,” said Michael Hewson, chief market analyst at CMC Markets UK.
The U.S. central bank is expected to stand pat on policy when it announces its decision at 1900 GMT. Investors will be watching for Fed Chairman Jerome Powell’s tone for clues on the state of the economy. Easy monetary policy adds pressure on government bond yields and benefits non-yielding gold.
Meanwhile, U.S. President Joe Biden‘s $1.9 trillion stimulus plan has been met with objections from Republicans over the price tag. “The $1.9 trillion is not going to be there and it won’t come much before March, so the market may have to get used to the idea of a lower amount at a later point in time,” added CMC’s Hewson.
U.S. stimulus plan doubts also weighed on U.S. Treasury yields, while the dollar rebounded and was on track for its best day in nearly two weeks. Gold
Silver fell 0.3% to $25.35 an ounce, while platinum shed 1% to $1,086.72. Palladium eased 0.4% to $2,316.13, sliding for a fifth straight session after hitting its lowest since Dec. 22 at $2,300.50 on Tuesday.