World Gold Prices Rise Ahead Of Fed Meeting

Gold Price Illustration (Photo: Doc. Antara)

JAKARTA - The world's gold price strengthened at the end of trading Wednesday, February 22. This increase is ahead of the interest rate decision of the Federal Open Market Committee (FOMC) meeting.

The gold movement reversed from profit-taking the day before after this precious metal was traded at a high technical level.

Citing Antara, the most active gold contract for April delivery in the Comex New York Exchange division, raised 8.50 dollars, or 0.44 percent, to close at 1,949.60 US dollars per ounce, after trading to reach the highest level of the session at 1,970.00 US dollars and the lowest at 1,936.50 US dollars.

Gold futures fell 41.70 US dollars or 2.10 percent to 1,941.10 US dollars on Tuesday (21/3/2023), after rising 9.30 US dollars or 0.47 percent to 1,982.80 US dollars on Monday (20/3/2023), and jumped 50.50 US dollars or 2.63 percent to 1,973.50 US dollars on Friday (17/3/2023).

Shortly after the gold trading floor closed, the FOMC meeting ended, and the Federal Reserve announced to raise the benchmark interest rate by a quarter percentage of points to the range of 4.75-5.00 percent, signaling another interest rate increase this year.

Federal Reserve said in a statement that "some additional policy strengthening may be appropriate" to bring inflation back to its target of 2.0 percent. But the central bank is not projecting a lower interest rate this year.

"Inflation remains too high, and the labor market continues to be very tight," Powell said. "My colleagues and I understand the difficulties caused by high inflation, and we remain strongly committed to reducing inflation to our target by 2.0 percent. Price stability is the responsibility of the Federal Reserve. Without price stability, the economy does not work for anyone."

Powell also said the US financial system remains worrying despite calling the financial industry overall "healthy and resilient". Some analysts see it as a further support for the gold position as a safe haven.

Gold futures are rising in electronic trading following the Federal Reserve's interest rate hike decision. Fed policymakers will meet again in early May.

Another precious metal, silver for May delivery, increased by 36.10 cents, or 1.61 percent, to close at 22.786 dollars an ounce. Platinum for April delivery increased by 10.30 dollars, or 1.05 percent, to settle at 987 dollars an ounce.