Gold futures climbed on Wednesday, with commodity investors positioning prices for a third straight rise ahead of a Federal Reserve statement that could prove mostly bullish for long-term metals investors.

Investors expect the Fed to express continued support, even though the central bank won’t change interest rates from a range of 0% to 0.25% on Wednesday. The Fed’s statement will be released about half an hour after precious metals prices settle on the Comex.

“Expect [the Fed’s] economic forecast to be better, with lower rates for longer,” said George Gero, managing director at RBC Wealth Management, in a daily note.

Read. The Fed is “fighting the last war”, here are the risks of its new strategy.

Against this backdrop, December gold
GCZ20
,+0.41%
.

GC00
, +0.41%


According to FactSet data, up $7.10, or 0.4 percent, at $1,973.30 an ounce, the most active contract prices are expected to settle again at the highest point on September 1.

Investors will look for “hints about how long interest rates may remain, or whether they are considering negative interest rates,” according to Colin Cieszynski, chief market strategist at SIA Wealth Management, the Federal Open Market Committee’s “economic forecast may attract people seeking insight into the health of the U.S. economy and the momentum of its recovery. biggest concern for investors.”

However, Gero said that looking ahead to the longer-term outlook for gold, “U.S. election headlines, U.S.-China tensions, and stimulus legislation” are among the factors that could add to the metal’s volatility.

Gold prices initially fell, then edged higher on Wednesday following USretailsalesdata that showed a 0.6 per cent increase in August, the third straight month of growth, but momentum appears to be waning after a burst of demand after the country opened its doors earlier in the summer.

Meanwhile, December silver
SIZ20,
+0.14%

.

SI00
,+0.14
%.


It was up 3 cents, or 0.1 percent, at $27.495, after rising 0.4 percent in the previous session.

Previously, “the industrial component was headwind for silver, but now improved retail sales in China and the global “reopening of the economy” and the return of industrial demand is “the name of the game”, Gero said.

Also on the Comex, December copper
HGZ20
,-0.13


down 0.1% to $3.06 a pound.

October platinum
PLV20
, -0.14%
.


fell 0.4% to $978.60 an ounce, but December palladium
PAZ20
, +0.68%
.


It rose 0.2 percent to $2,418.50 an ounce, holding its most active contract level since March.

“We suspect that for the [palladium] price to continue to rise and get back to the $2,500 level, every day will require positive economic psychology, higher global equity markets and positive economic data from China,” analysts at Zaner Metals said in a daily commentary.

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2020-09-16