Gold hovers near 4-week low, traders eye Fed meeting

Gold hovers near 4-week low, traders eye Fed meeting

Gold prices lingered near a four-week low on Wednesday, with investors turning their attention to the outcome of the U.S. Federal Reserve's policy meeting for more signals on its rate cut timeline.

FUNDAMENTALS

* Spot gold was little changed at $2,288.21 per ounce as of 0023 GMT. Prices fell as much as 2% to their lowest level since April 5 on Tuesday, due to an uptick in the dollar and U.S. Treasury yields.

* U.S. gold futures were down 0.2% at $2,298.70 per ounce.

* Focus is now on the U.S. central bank's policy decision due at 1800 GMT. Fed is expected to hold its benchmark interest rate steady at 5.25% to 5.5% at the meeting.

* Markets have lowered bets of Fed rate cuts this year due to recent hotter-than-expected U.S. economic data and sticky inflation.

* Higher rates reduce the appeal of holding non-yielding bullion.

* U.S. labor costs increased more than expected in the first quarter amid a rise in wages and benefits, confirming the surge in inflation early in the year that will likely delay a much- anticipated interest rate cut later this year.

* The World Gold Council (WGC) said on Tuesday that global gold demand rose by 3% year-on-year to 1,238 metric tons in the first quarter of 2024, marking the strongest first quarter since 2016.

* South Korea's central bank may consider buying more gold only in the mid- to long-term, but is not thinking of immediately buying more, a bank official said on Tuesday.

* Spot silver rose 0.1% to $26.30 per ounce, platinum was up 0.1% at $934.65, while palladium lost 0.6% to $941.25.

DATA/EVENTS (GMT)

0600 UK Nationwide house price MM, YY April

0830 UK S&P Global Manufacturing PMI April

1345 US S&P Global Mfg PMI Final April

1400 US ISM Manufacturing PMI April

1800 US Federal Open Market Committee announces its decision on interest rates followed by statement