By Brijesh Patel
(Reuters) -Gold held near a two-week peak on Tuesday, helped by a pullback in the dollar, although prices were stuck in a narrow range as focus turned to the Federal Reserve’s policy meeting for updates on the interest rate outlook and economic projections.
Spot gold was up 0.1% at $1,934.10 per ounce at 09:26 a.m. EDT (1326 GMT) after hitting its highest since Sept. 5 earlier in the session. U.S. gold futures gained 0.2% to $1,956.80.
The dollar index eased from a six-month peak against its rivals, making gold less expensive for other currency holders. [USD/]
Investors will be looking out for updated forecasts from Fed officials at the end of a two-day policy meeting on Wednesday, after a recent raft of strong U.S. economic data reduced recession fears.
Traders expect a 99% chance of the Fed leaving rates unchanged at the end of its meeting, with a 35% probability of another rate hike before 2024, according to the CME’s FedWatch Tool.
“The expectation is that the Fed still going to lean hawkish on monetary policy tomorrow because they want to get inflation closer to their 2% target, which would be not good for gold,” said Jim Wyckoff, senior market analyst at Kitco.
“The important thing will be the press conference from Chair Jerome Powell and statement possibly hinting what the Fed might do into the end of the year,” Wyckoff added.
The prospect of the Fed holding rates higher for longer has lifted benchmark 10-year Treasury yields to 16-year highs, denting non-yielding bullion’s appeal. [US/]
Also on the radar, central bank meetings at the Bank of Japan, the Bank of England and the Swiss National Bank, among others, are due this week.
Elsewhere, silver rose 0.5% to $23.35 per ounce, platinum gained 1.3% to $945.58, and palladium climbed 2.4% to $1,265.
(Reporting by Brijesh Patel in BengaluruEditing by Mark Potter)