Gold prices firm ahead of Fed announcement

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Reuters | Updated: March 15, 2017 7:39:55 AM

Gold prices held steady on Wednesday ahead of the outcome of a two-day Federal Reserve meeting, with the U.S. central bank widely expected to raise interest rates.

gold, gold news, gold prices, gold prices todayUS producer prices increased more than expected in February as the cost of services such as hotel accommodation pushed higher and the year-on-year gain was the largest in nearly five years, pointing to steadily rising inflation pressures. (Reuters)

Gold prices held steady on Wednesday ahead of the outcome of a two-day Federal Reserve meeting, with the U.S. central bank widely expected to raise interest rates. Spot gold had edged up 0.1 percent to $1,199.34 per ounce by 0040 GMT. U.S. gold futures were down 0.3 percent at $1,199 per ounce.With a rate increase by the Fed seen as a done deal, investor focus is shifting to what message the central bank will deliver when it concludes its meeting on Wednesday. In December the Fed forecast three rate rises this year. The statement from the Fed, due at 1800 GMT on Wednesday, will be followed by a briefing at 1830 GMT.

Investors were also focusing on Wednesday’s Dutch elections, which have been boosting gold’s safe-haven appeal. The Party for Freedom is seen as having little chance of coming to power, but a strong election performance for the group that wants to “de-Islamicise” the Netherlands would fuel worries over a surprise result in French presidential elections in April and May. In Britain, concerns have increased over a second Scottish independence referendum and the triggering of Article 50, which would formally begin British negotiations to leave the European Union. Holdings of SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, rose 0.36 percent to 834.99 tonnes on Tuesday from Monday. U.S. producer prices increased more than expected in February as the cost of services such as hotel accommodation pushed higher and the year-on-year gain was the largest in nearly five years, pointing to steadily rising inflation pressures.

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