2021.10.2710:46:00UTC+00Gold Edges Lower Ahead Of Central Bank Meetings

Gold edged lower on Wednesday as a firmer dollar and higher U.S. Treasury yields increased the opportunity cost of holding the non-interest bearing metal.

Spot gold dipped 0.3 percent to $1,786.51 an ounce while U.S. gold futures were down 0.3 percent at $1,787.95.

Benchmark 10-year US Treasury yields firmed above 1.6 percent and the dollar steadied close to a one-week high hit on Tuesday as investors key central bank meetings this week for policy cues.

The U.K. is likely to introduce a new spending plan at the annual budget later today, while the Bank of Canada holds a policy-setting meeting.

The European Central Bank is expected to keep interest rate unchanged and push back on market inflation forecasts, when it meets on Thursday.

The Bank of Japan is unlikely to alter its policy settings on Thursday when it concludes its two-day monetary policy review meeting. The central bank is seen cutting growth and price outlook ahead of the Oct 31 election.

The U.S. Federal Reserve holds a policy meeting next week and is expected to announce plans to phase out its $120 billion in monthly asset purchases by the middle of 2022.

Elsewhere, Australia's core inflation accelerated to a six-year high in the third quarter, fueling hopes that the Reserve Bank of Australia may tighten monetary policy earlier than projected.