SMM: COMEX gold futures rose on Tuesday, hitting a two-week high on hopes that the Fed would take a dovish monetary policy stance to rein in the dollar.
Monthly gold futures in COMEX12, the most actively traded, rose 2.50 U.S. dollars, or 0.1 percent, to settle at 1966.20 U.S. dollars an ounce at 13:30 new York time.
December silver futures rose 10. 9 cents to settle at $27.464 an ounce.
October platinum futures rose $23.50 to settle at $982.2 an ounce.
December palladium futures rose 90. 10 U.S. dollars to settle at 2414.50 dollars an ounce.
In addition, the COMEX12 monthly copper contract fell half a cent to settle at $3.0630 a pound.
BobHaberkorn, senior market strategist at RJOFutures, said: "the dollar has rebounded from its lows and we have seen some sell-off in gold, but this is temporary, with dovish comments from the Fed meeting and further explanation of its new inflation target could push gold above $2000."
The dollar index rose, making gold more expensive for investors holding other currencies.
Investors are now waiting for the Fed's two-day policy meeting, which will issue a policy statement on Wednesday.
Analysts expect the Fed to confirm that it will maintain a near-zero interest rate policy for the next three years, a view that could further weigh on the dollar.
Analysts don't expect the Fed to raise interest rates on Wednesday, but if it does, it could be good for the dollar.
A group of Democratic and Republican members of the US Congress have announced a $1.5 trillion aid bill for novel coronavirus, which they hope will break the deadlock.
Unprecedented monetary stimulus and low interest rates have pushed gold up 29% this year as gold is seen as a hedge against inflation and currency depreciation.
On Tuesday, Huaqi Group (Citigroup) said it was bullish on gold rising to $2400 an ounce in the next 12 months.
The bank pointed out that there are three main reasons to show that the upward trend in gold is still intact. The record increase in gold ETF holdings, the weakness of the US dollar and the fall in real interest rates to negative values are all the main reasons for pushing gold prices higher.
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