Gold prices tepid as traders cautious amid Evergrande, pre-Fed jitters

Gold prices tepid as traders cautious amid Evergrande, pre-Fed jitters

Gold prices were subdued on Tuesday as cautious investors braced for U.S. Federal Reserve's guidance on tapering its assets and interest rate hikes, while risk-off sentiment stoked by China Evergrande's debt crisis limited losses in the safe-haven metal. Bullion is considered as a hedge against inflation and currency debasement likely to result from the widespread stimulus. A hawkish move by the Fed would diminish gold's appeal, while an eventual interest rate hike would also raise the opportunity cost of holding the non-interest bearing asset. Spot gold inched 0.2% lower to $1,760.80 per ounce by 0645 GMT, while U.S. gold futures were flat at $1,762.10. "In the longer term, they're (gold prices) still skewed to the downside because we're going to continue to see the Fed wanting to push towards normalizing monetary policy, which typically is not a good environment for gold," IG Market analyst Kyle Rodda said. The Fed is likely to provide an outlook on how soon and how often they think the economy will need interest rate rises over the next three years at their policy meeting on Wednesday. Gold prices recovered on Monday from a more than one-month low of $1,741.86 as concerns over the fallout from