Gold rebounded from the biggest one-day decline this year before the Federal Reserve begins a two-day policy meeting to assess the timing of interest-rate increases amid slumping energy prices and signs of an improving economy.
Bullion for immediate delivery added as much as 0.5 percent to $1,199.41 an ounce and traded at $1,198.28 at 9:14 a.m. in Singapore, according to Bloomberg generic pricing. The metal sank 2.4 percent yesterday, the most since Dec. 19, as U.S. manufacturing data that beat estimates supported the case for higher borrowing costs next year.
The Bloomberg Dollar Spot Index was little changed below a five-year high as Fed officials gather Dec. 16-17 to debate the pace of raising benchmark interest rates, which have been near zero since 2008, after ending an asset-purchase program in October. Oil prices have tumbled to five-year lows, potentially pushing inflation further below the Fed’s 2 percent target.