Gold eases on stronger dollar, Fed verdict in focus
Shafaq News / Gold prices edged lower on Monday as the dollar held firm, while investors looked forward to U.S. inflation data and the Federal Reserve’s interest rate hike verdict.
Spot gold was down 0.2% at $1,956.82 per ounce by 0454 GMT. U.S. gold futures eased 0.3% to $1,971.10.
Markets in Australia were closed on Monday due to a public holiday.
“While the Fed is expected to hold their interest rate, they are unlikely to deliver a dovish undertone required to tempt gold bulls back to the table in a meaningful way,” said Matt Simpson, senior market analyst at City Index.
The dollar index held firm, making bullion less appealing for overseas buyers.
The U.S. consumer price index and producer price index data on Tuesday and Wednesday, respectively, are on investors’ radar, as a hotter CPI number could alter rate expectations.
Fed fund futures show a 73.6% probability that the U.S. central bank will keep its benchmark overnight interest rate in the 5.00%-5.25% range when its two-day meeting ends on Wednesday.
“There are (still) some reservations that keeping rates on hold is just a wait-and-see from the Fed rather than an end to tightening, and there is still the possibility of additional tightening over subsequent meetings,” Yeap Jung Rong, market strategist at IG, said.
Lower rates lift the appeal of the zero-yield asset.
Bullion does not appear to be in any hurry to break out of the $1,935-$1,985 range, City Index’s Simpson said, adding if the Fed’s “message is not as hawkish as expected, it could allow gold to head for the $1,985-$2,000 zone.”
In the physical market, retail gold demand slowed in top consumers China and India last week, forcing dealers to offer discounts, with volatile prices in India prompting buyers to delay purchases.
Spot silver fell 0.7% to $24.0993 per ounce, platinum shed 0.6% to $1,002.22.
Palladium lost 0.2% to $1,320.17 after hitting its lowest since May 2019 on Friday.
(Reuters)
