Gold Reclaims $4,000 Ahead of Fed Rate Decision as Bargain Buying Returns

Gold traded above $4,000 an ounce ahead of the Federal Reserve's rate decision, supported by bargain buying.

According to Bloomberg on October 27, spot gold was little changed at $4,060.73 an ounce as of 7:30 a.m. Singapore time on October 28. Bullion had climbed 1.1% in the previous session.

Gold recently fell to its lowest level since mid-July after a sharp selloff in artificial intelligence-related stocks. Investors sold the metal to cover losses in other assets, increasing downward pressure.

Still, physical demand and bargain hunting emerged after gold slipped below $4,000, helping to limit further declines. In China, household demand for gold purchases has expanded over the past two months as gold prices corrected and the appeal of the domestic stock market weakened.

Markets expect the Fed to hold its benchmark rate steady at this meeting. That would be supportive for gold because the metal does not pay interest. At the same time, investors are also pricing in the possibility of another rate increase later this year.

Traders are also watching comments from Fed Chair Kevin Warsh after the decision. Even if the Fed leaves rates unchanged, gold's direction could depend on how strongly he emphasizes the central bank's determination to contain inflation.

Spot silver edged up to $54.44 an ounce, while platinum and palladium also gained. The Bloomberg Dollar Spot Index, after rising 0.3% the previous day, also moved slightly higher.