Gold futures edged lower on Wednesday, holding ground near the lowest price in three weeks, as investors watched for the latest update from the Federal Reserve on the pace of U.S. economic growth and inflation in the recovery phase from COVID-19.

The Federal Reserve concludes its two-day meeting on Wednesday, with a statement due to be released at 2 p.m. ET, a half-hour after metals settle on Comex.

“The Fed policy statement will be crucial for gold,” Brien Lundin, editor of Gold Newsletter, told MarketWatch. If the central bank indicates that the delta outbreak is “leading them to put off any thoughts of tapering [quantitative easing] until next year, it should be very bullish for the metals.”

August gold
GCQ21,
-0.26%

GC00,
-0.26%

fell $5.20, or 0.3%, at $1,794.60 an ounce, after gaining just 60 cents on Tuesday. Prices for the most-active contract were poised to mark their lowest settlement since July 6, FactSet data show.

The Fed’s stance will “set the tone for future fluctuations in gold prices,” wrote Naeem Aslam, chief market analyst at AvaTrade in a daily note.

“A surprising hawkish tone could send the precious metal tumbling, implying an impending rise in interest rates, reducing gold’s appeal. It would also help to boost the dollar index,” Aslam said.

“However, a change in the Fed’s stance is unlikely, and thus gold prices are expected to remain stable,” the AvaTrade analyst wrote.

Read: Fed, in no hurry, won’t give signal on tapering

Chairman Jerome Powell will hold a news conference at 2:30 p.m., where he will likely reiterate the central bank’s view that surging inflation is temporary. Any talk of timing of how and when to pare back the Fed’s $120 billion in monthly asset purchases will be closely followed.

In other metals trading, September silver
SIU21,
+0.80%

SI00,
+0.80%

was up 12.6 cents, or 0.5%, at $24.78 an ounce, after shedding 2.6% on Tuesday.

September copper
HGU21,
-1.28%

lost 1.5% to $4.48 a pound. October platinum
PLV21,
-0.02%

shed 0.2% to $1,047.70 an ounce, but September palladium
PAU21,
+0.07%

traded at $2,606 an ounce, down 0.03%.

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