Gold price drops as investors eye US rate decision

Gold fell to a one-month low and trading volume declined as investors held off on making big moves before Federal Reserve policymakers meet next week.

While Fed fund futures show that traders have backed away from expectations that the Central Bank will tighten this month, economists surveyed by Bloomberg are still nearly balanced between those who expect a rate rise and those who say officials will delay any action.

Higher borrowing costs reduce bullion’s allure because it doesn’t offer returns, unlike assets such as bonds or equities. Fed policymakers meet from September 16 to 17.