Gold Prices Edge Higher, Eyeing Fed Meeting; Palladium Hits Record

Investing.com – Gold prices edged higher, buoyed by expectations the Federal Reserve will send markets a more dovish message about future monetary policy after the two-day policy meeting that starts later on Tuesday.

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Comex gold futures rose $7.75, or around 0.6%, to $1,309.25 a troy ounce by 8:25AM ET (12:25 GMT).

Meanwhile, spot gold was trading at $1,309.43 per ounce, up $5.75, or 0.45%.

The Federal Reserve’s Federal Open Market Committee (FOMC) begins its two-day policy meeting later Tuesday, with a decision on interest rates due Wednesday afternoon.

The U.S. central bank will also release new forecasts for economic growth and interest rates, known as the “dot-plot”, which many analysts say will probably point to at most one more interest rate hike this year. The Fed has already signaled that it’s extremely unlikely to raise rates again in the near term, after four hikes in 2018.

The dollar index, which measures the greenback against a basket of six major currencies, was a shade lower at 95.85, hovering close to a two-week low.

“The dollar is under a little bit of pressure, providing some support to the metal,” Capital Economics analyst Ross Strachan said.

In other metals trading, palladium prices hit their highest levels on record following news that Russia is planning to ban exports of precious metals scrap.

Spot palladium was up 1.4% at $1,599.11 an ounce, having hit a record high of $1,601.45 earlier in the session.

“There have been rumors that Russia would restrict exports of some scrap materials. When the market is as tight as palladium is, sometimes such news can take on more significance than it should,” said Philip Newman, a director at Metals Focus.

Russia is a major producer of palladium, which is used mainly in catalytic converters for cars with gasoline engines. Demand for palladium has increased as diesel engines have lost market share in response to public concerns about air quality.

Elsewhere, silver futures tacked on 10.6 cents, or about 0.7%, to trade at $15.42 a troy ounce, while platinum gained 1.7% to $848.10 an ounce.

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