On Wednesday, gold prices traded in a narrow range after dropping sharply the previous day as markets braced for a Federal Reserve interest rate decision. At the same time, as concerns over a banking crisis subsided, demand for gold as a safe haven decreased.

As a result of government involvement that helped allay concerns about an impending catastrophe in the U.S. and European banking systems, gold prices were still suffering severe losses from the previous session. Due to the fact that demand for safe havens was a major factor in the recent advance of the yellow metal, this led to markets selling gold at one-year highs.

When worries about a bank crisis decreased, markets started to factor a higher likelihood that the Fed will continue to fight inflation. The likelihood of rising interest rates is not favourable for assets with no yield, such as gold.

Spot gold remained unchanged at $1,940.80 per ounce at 22:09 ET, while gold futures soared by 0.4% to $1,944.10.

Following a one-year high, both main gauges dropped by around 2% each on Tuesday.

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