Gold edges higher ahead of Fed meeting

Gold prices inched up 0.2% to $1,983.21 per ounce on Wednesday morning ahead of the U.S. Federal Reserve’s closely-watched policy meeting, but remained near a three-week low as the dollar continues to strengthen.

However, weaker Treasury yields have offered some respite to bullion.

Investor focus is on whether Fed chair Jerome Powell will signal a policy pivot when he speaks after the rate decision today. Markets see a high chance of a rate cut in May.

The Fed is still expected to leave rates unchanged for now, at 5.25%-5.50%. Lower rates tend to benefit non-yielding gold.

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Confidence has waned that the Fed will embark on rate cuts early next year to boost growth, as was previously expected. The dollar index rose 0.1%, making bullion more expensive for foreign buyers.