Gold prices rose on Wednesday, after trading in a narrow price range ahead of a policy announcement from the Federal Reserve. Gold for December delivery was recently up 0.5% at $1,335.20 a troy ounce on the Comex division of the New York Mercantile Exchange. Analysts expect stagnant trading until the Fed’s meeting concludes Wednesday afternoon, as investors watch for indications on whether a recent improvement in U.S. economic data has made interest-rate hikes more likely this year. “This week the market is in the wait-and-see mode with regard to the [Fed’s] meeting,� said Carsten Menke, a commodities research analyst at Julius Baer. “The Fed wants to prepare the markets for a hike, which could put pressure on gold.� Rate hikes typically blunt gold’s appeal by boosting the dollar. Rate increases also entice investors away from safe-havens such as gold, which doesn’t bear interest, and into instruments that offer better returns. Some investors are rushing to close out existing positions on gold ahead of the Fed statement, said George Gero, managing director at RBC Wealth Management. While traders don’t expect the Federal reserve to change interest rates at the July meeting, speculation over a rate increase by the end of the year has grown in the past month. “Most traders still think that the one hike that the Fed may talk about will come in December. However, the invitation to cover shorts is very strong.� Mr. Gero said.

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