Gold Down, U.S. Yields Up Ahead of Fed Policy Decision By

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© Reuters.

By Gina Lee – Gold was down on Wednesday morning in Asia as U.S. Treasury yields rose and the upcoming from the U.S. Federal Reserve dented demand for the yellow metal.

were down 0.27% to $1,865.57 by 11:47 PM ET (3:47 AM GMT)

Benchmark firmed after retreating from the 3% mark hit during the previous session.

The Fed is widely expected to announce a big interest rate hike in an effort to curb high inflation when it hands down its policy decision later in the day. The Federal Open Market Committee will release its policy statement, followed by Fed Chairman Jerome Powell’s news conference.

Investors widely expect a decision on raising the benchmark overnight interest rates alongside details on reducing the Fed’s $8.9 trillion balance sheet.

“A 50-basis point hike is now priced in by markets… if the statement has a still more hawkish bias, then gold is likely to come under pressure once again,” OANDA senior analyst Jeffrey Halley told Reuters.

“If the statement remains mostly unchanged in its guidance, then a short-term recovery to $1,880 is possible as the dollar is likely to fall.”

The , which normally moves inversely to gold, inched up on Wednesday but remained close to 20-year highs.

Across the Atlantic, the will hand down its own policy decision on Thursday.

As the Russian invasion of Ukraine on Feb. 24 enters a tenth week, Russian troops pounded targets in eastern Ukraine on Tuesday. Meanwhile, the is preparing to unveil fresh sanctions on Moscow, which includes those on oil.

In other precious metals, inched down 0.1%, while was nearly unchanged at $961.62 and edged up 0.2%.

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