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Gold rises as the dollar falls as investors watch the US Federal Reserve meeting
Gold prices continued to rise on Tuesday, supported by the dollar's decline, while investors focused on the start of a Federal Reserve meeting that may provide clues about the time frame of the US Central Bank for an expected cut in its stimulus program to support the economy.
And gold rose in spot transactions 0.6 percent to 1775.26 dollars an ounce in the late trading session in the New York market.
US gold futures rose 0.7 percent to $1,776.20 an ounce.
“The big question that needs to be answered is whether the current market uncertainty will change any potential timeline the Fed may have when it comes to announcing a reduction in its asset purchases,” said Michael Hewson, chief market analyst at CMC Markets UK.
Gold is a hedge against inflation that may result from widespread stimulus and currency depreciation. Higher interest rates increase the cost of holding non-yielding gold.
And the dollar fell from the highest level in a month recorded in the previous session, which makes gold cheaper for those holding other currencies.
