Gold prices steady as investors assess interest rate expectations

Gold prices stabilized today, Sept. 20, as investors evaluated expectations of interest rate decisions by several central banks due to meet this week, headed by the Federal Reserve.

Gold futures for December delivery settled at $1,678.20 an ounce at 11:42 am Makkah time, while spot prices fell 0.38% to $1,669.45 per ounce.

Silver futures for December delivery rose slightly by 0.14% to $19.38 an ounce. The spot price for palladium shed 2.7% to $2,165.55 per ounce, with the spot price of platinum also up 0.29% to $921.54 an ounce.

The main dollar index, which measures the performance of the US currency against a basket of six currencies, gained 0.2% to 109.78 points.

Markets expect an increase of 75 basis points (bps) in US interest rates, with the possibility of a full percentage point hike. Investors also project Bank of England (BoE) to raise rates between 50 and 75 bps, while expecting Bank of Japan to keep its accommodative policy unchanged.

However, in a research note, Sam Stovall, chief investment analyst at CFRA Research, ruled out a 100-bp rate hike when the Fed meets tomorrow, Sept. 21, noting that such a move does not bode well for the US stock market.