10.06.202010:34:00UTC+00Gold Extends Gains For Third Day

Gold prices rose on Wednesday to extend gains for the third day running amid expectations that the U.S. Federal Reserve will deliver a dovish message for interest rates later in the day.

The Fed policy statement on the state of the economy is expected at 2 p.m. Eastern Time, followed by a press conference led by Fed Chair Jerome Powell.

Spot gold edged up 0.25 percent to $1,718.77 per ounce, after having risen over 1 percent in the previous session. U.S. gold futures were up 0.2 percent at $1,724.75.

The dollar fell against major currencies ahead of the FOMC decision. Markets expect the Fed to maintain a dovish stance to support the economy through the coronavirus crisis, but negative interest rates are very unlikely.

Policymakers will publish their first economic projections since the Covid-19 pandemic set off a recession in February.

Gold is also benefiting from concerns surrounding growth. Japan's machinery orders slumped in April at their quickest pace in nearly two years, official data showed today.

China's factory gate prices fell deeper into deflation in May, while French industrial production dropped 20.1 percent in April from March, when output was down 16.2 percent.

The Organization for Economic Cooperation and Development (OECD) forecast the global economy would contract 6.0 percent this year before bouncing back with 5.2 percent growth in 2021.