Gold holds firm ahead of US Fed rate decision

Gold prices steadied today, July 27, as investors await a key decision on interest rates from the US Federal Reserve, which could influence the outlook for bullion.

Gold futures for August delivery settled at $1,717.50 an ounce at 10:02 AM Makkah time, while spot prices rose slightly by 0.12% to $1,719.53 per ounce.

Elsewhere, silver futures for September delivery reached $ 18.52 an ounce. The spot price for platinum held ground at $873.94, as the spot price of palladium fell 0.39% to $2,002.05.

Meanwhile, the main dollar index, which measures the performance of the US currency against a basket of six currencies, saw a marginal drop of 0.13% to 107.07 points.

Markets expect the US central bank to raise interest rates by 75 basis points for the second time in a row during today’s meeting, which will boost demand for US Treasury bonds as a superior safe-haven alternative to gold.

On the other hand, gold is buoyed by global economic recession fears, as US consumer confidence fell to its lowest level in nearly a year and a half in July amid persistent concerns about accelerating inflation and higher interest rates, which could undermine spending and slow economic growth in early Q3 2022.

On July 26, the International Monetary Fund (IMF) cut its global growth forecast to 3.2% for 2022, with expectations of a slowdown to 2.9% next year.