Gold prices lingered below the key $1,800 per-ounce level on Tuesday, as investors maintained a cautious stance ahead of the Federal Reserve policy meeting and awaited cues on the U.S. central bank’s timeline for tightening its monetary policies.
Spot gold was flat at $1,796.75 per ounce, as of 1048 GMT, after hitting a session low of $1,792.00, with a firmer dollar curbing the precious metal’s appeal further.
The dollar index was up 0.2%, hovering near the 3-1/2-month peak, making gold more expensive for holders of other currencies.
U.S. gold futures eased 0.1% to $1,796.90 per ounce.
Rising coronavirus cases in the United States “is certainly something that keeps the Fed to not change its outlook and rate policy for the time being,” Quantitative Commodity Research Analyst Peter Fertig said.
“Consumer confidence in the U.S. could change if we have rising cases of coronavirus.”
The Fed’s meeting will start later in the day and a policy statement will be issued at 1800 GMT on Wednesday, followed by a news conference by Fed Chairman Jerome Powell.
Investors will be looking at how the Fed responds to fast-rising prices while facing increasing threat posed by the more contagious Delta variant of the coronavirus.
“A daily close below $1,790.00 an ounce would suggest a deeper correction to the critical support at $1,750.00 an ounce,” Jeffrey Halley, a senior market analyst, Asia Pacific at OANDA said.
“However, the charts indicate that gold is, in fact, quietly consolidating at these levels in preparation for a resumption of the longer-term uptrend.”
Elsewhere, silver fell 0.2% to $25.10 per ounce, while platinum shed 0.8% to $1,055.94.
Palladium dropped 0.6% to $2,640.29, having earlier hit a one-week low of $2,613.51. (Reporting by Arundhati Sarkar in Bengaluru, Editing by Sherry Jacob-Phillips and Louise Heavens)