Gold rises as traders brace for Fed rate decision

Gold prices rose on Thursday but traded near a three-week low, as market participants awaited an expected rate cut decision by the US Federal Reserve, reports Reuters.

Spot gold gained 0.3 per cent to $2,668.23 per ounce, as of 1238 GMT, after hitting its lowest level since Oct. 15 earlier in the session. US gold futures were steady at $2,675.40.

The dollar index eased from a four-month high, following Republican Donald Trump's win in the U.S. presidential election. A stronger dollar tends to make bullion less attractive for overseas buyers.

"The long-term impact of the new administration's trade policies could lead to higher inflation, potentially forcing the Fed to maintain elevated interest rates for an extended period. In such a scenario, non-yielding assets like gold would likely come under additional pressure," said Ricardo Evangelista, senior analyst at ActivTrades.

Gold is considered a hedge against inflation but higher interest rates reduce non-yielding bullion's appeal.

Spot silver was steady at $31.18 per ounce, platinum slipped 1.1 per cent to $975.82 and palladium declined 0.3 per cent to $1,031.75.