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Gold was up on Tuesday morning in Asia, as investors awaited a U.S. Federal Reserve meeting later today to tackle growing inflation and bond yields concerns.

However, continued optimism for faster economic recovery from COVID-19 put pressure on the yellow metal.

Gold futures edged up 0.20% at $1,732.70 by 12:44 AM ET (4:44 AM GMT). Asian shares were mostly up on Tuesday.

“The Fed may address rising inflation concerns and even consider pushing forward asset purchasing to compensate for the rising yields and that would be very positive for gold prices,” DailyFX strategist Margaret Yang told Reuters.

However, “the overall sentiment is bearish, however, given the vaccine optimism and the passage of the stimulus packages,” Yang added.

The Federal Open Market Committee meeting is widely expected to forecast that the U.S. economy will accelerate at the quickest rate in decades in 2021, thanks to a ramped-up COVID-19 vaccination drive and a $1.9 trillion stimulus package. Unemployment is expected to drop, but inflation is expected to rise.

The Fed will also hand down its policy decision on Wednesday, with the Bank of England handing down its decision on Thursday and the Bank of Japan wrapping the week up with its decision on Friday.

“The strong recovery from COVID-19 has been raising concerns that the Fed may lift interest rates earlier than expected… However, Chair Powell and his colleagues have been quite persistent that maximum employment is far away, allowing them to be patient,” ANZ analysts said in a note.

Easing of the recent selloff on bonds has helped stabilize gold in recent days, the note added.

In other precious metals, silver fell 0.4% and palladium inched down 0.1 %. However, platinum inched up 0.1%.

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