Gold prices edged lower on Wednesday in early U.S. trading ahead of the Federal Reserve decision that is expected to yield a third interest-rate increase of the year, a potentially negative development for gold because it tends to lift the dollar and U.S. bond yields.
Many markets are subdued this morning, ahead of this afternoon’s U.S. conclusions of the Federal Reserve’s Open Market Committee (FOMC) meeting.
December gold futures were last down $3.10 an ounce at $1,202.00. December Comex silver was last down $0.013 at $14.48 an ounce.
World stock markets were mixed to mostly firmer overnight. U.S. stock indexes are also pointed toward firmer openings when the New York day session begins.
Traders and investors are awaiting the conclusion of the two-day FOMC meeting that began Tuesday morning and ends Wednesday afternoon with a statement. The FOMC is widely expected to slightly raise U.S. interest rates at this meeting, marking the third rate rise this year.
Jerome Powell, Fed Chairman will also hold a press conference after the meeting. As usual, the marketplace will parse the Fed’s and Powell’s wording for clues on the pace of future Fed rate hikes and the Fed’s inflation expectations.
Focus in Europe is now on the new Italian government’s economic plans to address its fiscal and financial problems, which are required by European Union law. Many believe Italian lawmakers won’t comply with EU rules on the matter.
The key outside markets today find the U.S. dollar index slightly higher on an upside correction from recent selling pressure. Meantime, November Nymex crude oil prices slightly lower and trading just above $72.00 a barrel.
Supply worries have boosted oil recently. U.S. sanctions against Iran begin in early November, which will likely take much of that country’s oil off the world market.
President Trump has singled out Iran in front of the United Nations this week as being a terrorist state that needs heavy economic sanctions.
Trump also called out the OPEC oil cartel for holding prices artificially high, saying OPEC countries may not get financial or military support from the U.S.