Gold prices fell on Monday as the dollar strengthened and investors braced for a series of policy decisions from major global central banks Gold prices fell on Monday, as the dollar strengthened and investors braced for a series of policy decisions from major global central banks, including the Federal Reserve, this week. Spot gold fell 0.4 percent to $2,147.79 an ounce. Gold futures fell 0.5 percent to $2,150.40, according to Reuters.
“It was a fairly hawkish result from the Federal Reserve,” said Kyle Rodda, a financial markets analyst at Capital.com. “It shows a fairly strong consensus that there may only be one or two cuts this year.” It is certain that the Federal Reserve will keep interest rates at 5.25-5.5 percent, by the end of its two-day meeting until Wednesday. But there is a possibility that the “Fed” indicates higher expectations for long-term policy; Due to the stability of consumer and producer inflation.
Traders now expect about a 56 percent chance of an interest rate cut during June. High interest rates reduce the attractiveness of holding non-yielding gold. Last week, data showed that US consumer prices rose strongly in February, and producer prices rose more than expected, amid the rise in the cost of goods such as gasoline and food. “If we get a less hawkish outcome from the Fed, there’s every reason we could see a weaker dollar, lower yields, and that could only fuel the rally, provide some fundamental momentum, and then you look at the $2,200 levels,” Rodda said.
The dollar settled near a two-week high against its competitors, making gold more expensive for holders of other currencies. Meanwhile, the Bank of Japan is expected to exit its ultra-cautious monetary policy at its two-day meeting, which ends on Tuesday. The Bank of England is scheduled to hold its meeting on Thursday, and is expected to remain on interest rates. In terms of other metals, silver fell in spot transactions 0.6 percent to $25.01, platinum fell 0.6 percent to $927.63 per ounce, and palladium lost 0.6 percent to $1,071.01.