Gold prices rose during these moments of trading, today, Wednesday, in conjunction with the market’s anticipation of the US Federal Reserve’s interest rate decision later in the day.

It is widely expected that the US Federal Reserve will raise interest rates again by 25 basis points, bringing the interest rate to 5.5 percent, its highest level since 2001.

Gold and the dollar now

Gold futures rose 0.4% to $1,971 an ounce.

While spot contracts rose by 0.27% to 1970 dollars an ounce.

On the other hand, the dollar index fell by 0.17% to 100.925 points.

gold when settling yesterday

Gold prices stabilized on Tuesday, with markets assessing economic data that reflected rising consumer expectations of a recession in the United States.

The prices of the yellow metal fell earlier, after the gains of the dollar index and US Treasury bond yields, in light of expectations that the Federal Reserve will raise interest rates by 25 basis points, during its current meeting, which issues its decision on Wednesday.

Gold prices increased after the release of the Conference Board Index survey, which reflected rising consumer expectations of a recession in the US over the next 12 months, to 70.6% from 69.9% in June.

Upon settlement, gold futures contracts settled at $1963.7 an ounce, after touching $1951.6 during trading.

Gold and keep the bullish trend

Markets are looking for an extended rate pause for the rest of the year, while Fed officials can undo this by leaving the door open for another hike in September or November, said Yap John Rong, market analyst at IG.

While most traders see the rate holding steady in a range of 5.25%-5.5% in 2023, 35% see a chance of another 25 basis point increase in November, according to the Saudi Arabia Investing Fed Interest Tracker.

Gold is very sensitive to rising interest rates because it increases the opportunity cost of holding non-yielding bullion.

However, Yap said: In the medium term, the yellow metal can still maintain its upward trend, given that we are in the last phase of the Fed's monetary tightening cycle.

Dollar and US Treasury yields were near two-week highs as of Tuesday, negatively impacting gold.

Financial markets are awaiting Federal Reserve Chairman Jerome Powell's speech on Wednesday, followed by the European Central Bank's rate decision on Thursday and the Bank of Japan the next day.

Besides monetary policy guidance from the European Central Bank, traders are also awaiting the US GDP data for the second quarter due on Thursday. The US economy is expected to grow by 1.8% during the April-June period compared to a rise of 2% in the first quarter.

Markets will also be watching personal consumption expenditures data for June due on Friday. Core personal consumption expenditures, the Fed's preferred measure of inflation, rose 0.2% in June compared to a 0.3% rise in May.