(RTTNews) – Gold held steady above $5,000 an ounce on Tuesday as investors looked at ongoing geopolitical developments in the Gulf region and prepared for a number of central bank decisions, including the US Federal Open Market Committee (FOMC) meeting on Wednesday.
Spot gold rose 0.2 percent to $5,018.64 an ounce, while US gold futures were up 0.4 percent at $5,023.
A stronger dollar limited potential gains as the US-Israeli war with Iran entered its 18th day. For the first time, Iran successfully targeted oil and gas production facilities rather than just refineries, terminals and storage.
A drone strike sparked a fire in the Fujairah oil industry sector in the United Arab Emirates (UAE), but reports suggest there were no casualties. The energy facility is located approximately 150 km (93 mi) east of Dubai.
Loud explosions and air defense interceptions were reported today in the United Arab Emirates, Saudi Arabia and Qatar.
The Israeli military said it had launched a “wave of large-scale attacks” on the Iranian capital and was also stepping up attacks on Iran-backed Hezbollah targets in Lebanon.
Meanwhile, several US allies, including Germany, Spain, Italy, Australia and Japan, have rejected President Donald Trump’s request to secure the Strait of Hormuz, a vital artery for a fifth of global energy shipments. The UK and France said they were ready to discuss options.
As inflation risks rise, investors are now awaiting monetary policy announcements from central banks including the Federal Reserve, the European Central Bank and the Bank of England.
The Federal Reserve’s policy decision is scheduled for Wednesday, with economists expecting the central bank to leave interest rates unchanged.
Market participants will closely watch Fed Chairman Jerome Powell’s updated economic projections and comments for additional clues on the Fed’s rate trajectory.
The Bank for International Settlements on Monday urged central banks not to rush to react to a surge in global energy prices caused by the Iran crisis, calling it a textbook case of when to “watch” for a supply shock.
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