Gold prices have risen more than 5 percent so far this year and hit an all-time high last week Gold prices fell slightly on Wednesday, due to the rise in the dollar, but remained trading in a narrow range, as investors awaited more signals about the policy of the US Federal Reserve. The spot gold price fell by 0.1 percent, reaching $2,176.80 per ounce, as of 05:33 (GMT). US gold futures remained unchanged at $2,175.40, according to Reuters.
The dollar index rose 0.1 percent against other currencies, making gold more expensive for holders of other currencies. Gold prices have risen more than 5 percent so far this year and hit an all-time high last week, supported by increased bets on Federal Reserve easing, continued safe haven demand, and central bank buying amid geopolitical tensions. “It is difficult to build an excessively bearish case for gold prices under the current conditions of geopolitics and possible central easing,” said City Index chief analyst Matt Simpson.
The US Central Bank kept the federal funds rate unchanged between 5.25 and 5.5 percent last week. He also maintained expectations to cut interest rates three times by the end of the year. Chicago Federal Reserve President Austin Goolsbee said on Monday that he expects to cut interest rates three times this year at the Federal Policy Meeting. Investors are now looking to US core personal consumption expenditures price index data scheduled for release on Friday to estimate when the Federal Reserve will begin cutting interest rates.
Traders are pricing in a 72 percent probability that the Federal Reserve will start cutting interest rates in June. According to CME Group’s Fed Watch tool, lower interest rates reduce the opportunity cost of holding bullion. SPDR GoldShare, the world’s largest gold-backed ETF, said its gold holdings fell by 0.62 percent to 830.15 tons on Tuesday. “Consistent with supported but somewhat sideways price movements, open position data shows that most inflows into gold in early March have been suspended so far,” JPMorgan said in a note.
Spot silver fell 0.1 percent to $24.40 an ounce, platinum fell 0.2 percent to $902.57, and palladium fell 0.3 percent to $990.39.