WASHINGTON (dpa-AFX) - Gold prices climbed higher on Wednesday as the dollar shed ground ahead of the Federal Reserve's monetary policy announcement. Rising tensions in the Middle East contributed as well to the rise in prices of the yellow metal.
The U.S. central bank is widely expected to leave rates unchanged today, but the bank's accompanying statement is eyed for clues about an interest rate cut in September.
With Fed officials repeatedly saying they need 'greater confidence' inflation is slowing before cutting rates, recent inflation data has led to optimism about a September rate cut.
According to CME Group's FedWatch Tool, there is currently an 87.7% chance the Fed will lower rates by a quarter point in September and an 11.9% chance of a half point rate cut.
The dollar index, which dropped to 103.93 around mid morning, recovered some lost ground subsequently, but still remained in red, losing about 0.3%.
Gold futures for August ended higher by $21.50 or about 0.9% at $2,426.50 an ounce. Gold futures gained about 4.25% in July 2024.
Silver futures for August ended up $0.413 or about 1.46% at $28.778 an ounce. Silver futures shed nearly 1.6% in the month.
Copper futures for August climbed to $4.1670 per pound, gaining $0.1040.
In economic news today, private sector employment in the U.S. increased by less than expected in the month of July, according to a report released by payroll processor ADP.
ADP said private sector employment climbed by 122,000 jobs in July after jumping by an upwardly revised 155,000 jobs in June.
Economists had expected private sector employment to increase by 150,000 jobs, matching the job growth originally reported for the previous month.
The National Association of Realtors released a report showing a substantial rebound by pending home sales in the U.S. in the month of June. NAR said its pending home sales surged by 4.8% to 74.3 in June after tumbling by 1.9% to a revised reading of 70.9 in May. Economists had expected pending home sales to jump by 1.3%.
Earlier in the day, the Bank of Japan lifted short-term policy rates and announced plans to reduce monthly bond buying in a hawkish pivot.
The Bank of England is scheduled to announce its monetary policy decision on Thursday.
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