Gold earnings with a look at the Fed

Gold fell 1% on Wednesday as the dollar stabilized as investors awaited the US Federal Reserve’s decision on interest rates, while supply concerns fueled by tensions over Ukraine led to an 8% rally in palladium.

US gold futures fell 1.1% to $ 1,831.40. Silver fell 0.2% to $ 23.77.

The dollar remained near a 2.5-week high in anticipation of the Fed’s policy decision. Money markets perim? Enoyn first rate hike in March, followed by three more quarterly increases until the end of the year.

Gold is driven by “a combination of profitability after setting new recent highs and in anticipation of the Fed meeting, little stability in the dollar and the prospect of rising interest rates,” said David Meger, chief metal trader at High Ridge Futures.

Investors continued to rely on the demand for safe haven amid a confrontation between Western powers and Russia over concerns that Moscow could invade Ukraine.

“Even more aggressive interest rate hikes could end up being positive for gold, as they would further increase the risk of a Fed policy mistake as it increases the risk of a recession,” Saxo Bank analyst Ole Hansen wrote in a note.

Palladium, meanwhile, jumped 7.3% to $ 2,359.79 an ounce, reaching its highest level since Sept. 8 at $ 2,382.82, while platinum climbed 2.1% to $ 1,047.00.