Waller of the Fed predicts a rate cut next month
Gold is rising for a second day as the U.S. dollar continues to fall, and investors are waiting for comments from U.S. Officials from the Federal Reserve, who may be able to shed light on the likelihood of monetary policy tightening.
Bullion prices have been fluctuating recently as markets assess the possibility of a tightening of monetary policy sooner than expected to combat inflationary pressures.
Bullion trade is expensive because of inflation concerns
Governor Christopher Waller said on Tuesday that the Fed should start tapering its bond-buying program next month, though higher interest rates are still a possibility.
“Gold is currently trading at a premium to what we believe is its fair value, and I believe this premium is linked to concerns about market inflation. In the coming year, gold may face even more downward pressure “Oversea-Chinese Banking Corp. economist Howie Lee said.
After rising 0.3 percent Tuesday, spot gold rose 0.3 percent to $1774.79 an ounce in London on Wednesday.
After falling 0.3 percent the previous session, the Bloomberg US dollar index was down 0.1 percent. Silver rose, while platinum remained stable and palladium fell.