© Reuters.
By Ambar Warrick
Investing.com– Gold prices moved in a narrow range on Wednesday, stabilizing after a steep drop in the previous session as markets fell ahead of the Federal Reserve’s interest rate decision, amid concerns about the The banking crisis eased, reducing the demand for safe-haven. yellow metal.
Bullion prices are falling sharply from the previous session as government intervention eased fears of an impending crisis in the US and European banking systems. This led to a market dumping gold at a one-year high, as the yellow metal’s recent rally was largely driven by safe-haven demand.
The easing of fears of a banking crisis also suggests that markets are beginning to value the greater possibility that the Fed will not falter in its fight against inflation. The prospect of rate hikes bodes ill for zero-yielding assets like gold.
unchanged at $1,940.80 an ounce, while up 0.4 percent to $1,944.10 an ounce by 22:09 ET (02:09 GMT). Both instruments fell nearly 2% on Tuesday, down sharply from one-year highs.
The losses also saw gold fall from the coveted $2,000 an ounce level, which analysts say will need more positive signals to hit.
The focus is now on the outcome of the Federal Reserve’s two-day meeting later in the day, with the central bank being widely expected to do so as the agency moves to rein in its stance. inflation is hotter than usual.
But the Fed’s outlook on monetary policy will be closely watched amid growing pressure on the economy. The recent collapse of the three US regional banks was largely due to their vulnerability to rising interest rates, which could be shared by other small and medium-sized lenders in the country.
Concerns about the banking crisis have boosted gold and precious metals prices in the past week.
Other precious metals edged higher on Wednesday, but are suffering heavy losses from the previous session. up 0.4%, while adding 0.6%.
Among industrial metals, copper prices fell after four consecutive strong gains. Alleviating fears of a banking crisis was the red metal’s biggest driver, which fell to a two-month low on concerns about slowing demand.
fell 0.3 percent to $3.9928 a pound, but has gained nearly 4% over the past four sessions.
