Gold prices moved higher on Wednesday, as sentiment on the greenback weakened ahead of the Federal Reserve monetary policy decision due later in the day
Gold Prices Move Higher Ahead of Fed Statement – Gold prices moved higher on Wednesday, as sentiment on the greenback weakened ahead of the Federal Reserve monetary policy decision due later in the day. The Fed is widely expected to raise rates by a quarter point at the conclusion of its two-day policy meeting on Wednesday, but investors will mostly be focusing on any indications as to the pace of monetary policy tightening for the remainder of the year. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.24% at 89.79. Gold is sensitive to moves in both U.S. rates and the dollar. A weaker dollar makes gold less expensive for holders of foreign currency, while a rise in U.S. rates lifts the opportunity cost of holding non-yielding assets such as bullion. Investors were also cautious amid ongoing fears of a potential trade war. The White House is expected to unveil up to $60 billion in new tariffs on Chinese imports by Friday,
targeting technology, telecommunications and intellectual property.
Crude Oil Prices Hover at Multi-Week Highs – Crude oil prices were hovering at multi-week highs on Wednesday, as potential supply disruptions due to tensions in the Middle-East continued to support, as well as upbeat U.S. stockpile data. Oil prices were supported after the American Petroleum Institute reported on Tuesday that U.S. crude stocks fell by 2.7 million barrels in the week ended March 16, compared to expectations for an increase of 3.2 million. The commodity was also boosted by speculation the U.S. could reimpose sanctions on Iran, as Saudi Arabia’s Crown Prince Mohammed bin Salman arrived in to Washington for a state visit. But market participants were still awaiting official data on oil and gasoline stockpiles due later Wednesday by the U.S. Energy Information Agency. High drilling activity has pushed U.S. crude oil production to rise to 10.38 million barrels per day (bpd), past top exporter Saudi Arabia.
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