Gold held above the $4,000 an ounce level on Wednesday 28 October as investors waited for the US Federal Reserve's interest-rate decision later in the day. Spot gold was little changed at about $4,061 an ounce in early trading, after gaining about 1% in the previous session, according to Reuters market reporting. US gold futures for December delivery steadied near $4,075.60.

Why the Fed matters for gold

The central bank is widely expected to leave interest rates unchanged at this meeting. That expectation tends to support gold, which pays no interest, because higher rates raise the opportunity cost of holding the metal and can strengthen the dollar. Traders are nevertheless watching the Fed's language closely for signals about whether a rate rise could still come before the end of the year, particularly while energy prices remain elevated and inflation concerns persist.

Dip buyers provide support

Market reporting on 28 October described dip buying — investors stepping in after recent falls — as helping to keep gold above $4,000. The metal had dropped below that level last week for the first time since mid-July, amid a sell-off linked to artificial-intelligence-related stocks and worries that higher oil prices could push inflation up. Physical buyers and bargain hunters have since helped to limit a deeper decline, with reports also pointing to continued appetite from Chinese households for bullion.

What to watch next

Silver was little changed at about $54.41 an ounce, while platinum was marginally lower and palladium edged up. Beyond the Fed decision itself, investors will look to US inflation data due on Thursday for further guidance on the path of interest rates — and therefore on whether gold can hold its latest recovery or slips back below $4,000. Sources: Reuters via BusinessLine live market blog and BBRW.