FILE PHOTO: A worker pours gold at the AngloGold Ashanti mine at Obuasi. Ghana, October 23, 2003 (REUTERS / Luc Gnago)
London: Gold prices edged up yesterday as the market waited for more clues on how many times the US Federal Reserve will raise interest rates this year and on uncertainty over the outcome of Dutch elections.
With an immediate US rate increase seen as a done deal, investors are focusing on what message the central bank will deliver when it concludes a two-day meeting on Wednesday. In December, the Fed forecast three rate rises this year. Spot gold had edged up 0.2 percent to $1,200.47 per ounce by 1223 GMT while US gold futures rose 0.1 percent to $1,200.70 per ounce. "The market is in wait and see mode for this afternoon when we hear what the Fed will do this year," Mitsubishi analyst Jonathan Butler said.
"The increase is largely in the price. The really interesting thing will be how hawkish the Fed sounds when they give the forecast of rate rises for the year," he said. Gold is highly exposed to interest rates and returns on other assets, as rising rates lift the opportunity cost of holding non-yielding bullion.
The statement from the Fed, due at 1800 GMT yesterday will be followed by a briefing at 1830 GMT. Further bolstering gold, the dollar index slipped 0.1 percent to 101.620. Investors were also focusing on Wednesday's elections in the Netherlands,
