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Fed policy decision due at 1900 GMT
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India hikes duty on items made from gold, platinum
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India also raises taxes on silver imports
(Updates prices)
By Kavya Guduru
Feb 1 (Reuters) - Gold prices were stuck in a tight
range on Wednesday as investors held back from making large bets
ahead of much awaited U.S. Federal Reserve's rate-hike decision
later in the day.
Spot gold was little changed at $1,929.07 per ounce
by 1138 GMT, after falling to its lowest since Jan. 19 in the
previous session. U.S. gold futures held steady at
$1,929.20.
"It's pretty certain that the Fed is going to hike rates by
25 basis points," said Michael Hewson, chief market analyst at
CMC Markets. But "the risk is very much towards the downside for gold,
because Powell needs to slightly reset market expectations about
what's likely to come afterwards", he added.
The U.S. central bank is set to issue its policy statement
at 1900 GMT, followed by a press conference from Fed Chair
Jerome Powell at 1930 GMT.
Gold tends to appreciate on expectations of lower interest rates, which reduce the opportunity cost of holding non-yielding bullion. However, any hawkish messaging could introduce quite a bit of downside risk, and gold could revisit Tuesday's lows in the aftermath of the Fed decision, Hewson said. Elsewhere, spot silver fell 0.7% to $23.5362. In its federal budget for 2023/24, the world's biggest silver importer India raised total taxes on silver imports to 15% and on silver dore to 14.35% in an effort to align the duty structure of the metal with gold. The key precious metals consumer also announced an increase in duty on items made from gold and platinum. Platinum shed 0.4% to $1,007.22 while palladium was up 0.8% at $1,663.30. Analysts have cut their palladium price forecasts and raised platinum price estimates as electric and hydrogen-powered vehicles disrupt the auto industry on which both metals rely for demand, a Reuters poll showed. (Reporting by Kavya Guduru and Arundhati Sarkar in Bengaluru; Editing by Jan Harvey and Louise Heavens)
