KONTAN.CO.ID - JAKARTA. Gold prices were hemmed into a tight range on Wednesday with investors focused on the outcome of the U.S. Federal Reserve's policy meeting for signals on its rate hike plans. Spot gold fell 0.1% to $1,714.89 per ounce by 1402 GMT. U.S. gold futures fell 0.3% at $1,713.10. Despite gold's status as an inflation hedge, bullion's shine dims amid rising interest rates as it is a non-interest yielding asset.
"If the Fed hikes rates by 100 bps, this might reduce demand for precious metals. But if they stick to a 75 bps hike, then there is chance that gold could see a relief rally," said Jim Wyckoff, senior analyst at Kitco Metals. Read Also: Oil Rises on U.S. Inventory Drop, Russian Gas Cuts With the Fed expected to hike its key interest rate by three-quarters of a percentage point on Wednesday, focus will shift to how deeply signs of an economic slowdown have registered with its policymakers. "Given the market is priced for a 75 bps hike at this meeting, the focus will be on whether the September meeting will see the pace of hikes slow," TD Securities said in a note. Gold has lost more than $300 since climbing past the $2,000-per-ounce level in early March due to the Fed's aggressive rate increases and the dollar's recent rally, overshadowing bullion's appeal as a safe-haven despite recession risks.