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Gold declines before the start of the Fed meeting
Gold prices fell during these moments of trading, on Tuesday, due to the rise in the dollar, while investors looked forward to the Federal Reserve (US Central Bank) meeting on monetary policy, which may provide further evidence on the timing of reducing interest rates this year.
The dollar rose more than 0.2 percent to its highest level in about two weeks, making gold more expensive for holders of other currencies.
The Federal Reserve is widely expected to keep interest rates steady at the end of the two-day monetary policy meeting that ends on Wednesday, as markets await updated economic forecasts and interest rates from policymakers.
“Gold remains above the $2,150 per ounce support level, and as long as it can stay above that level, short-term gains will depend on Fed Chair Jerome Powell’s comments this week,” said Tim Waterer, market analyst at KCM Trade.
“If the Fed focuses on the recent CPI and PPI numbers and continued labor market strength, we could see some of those hopes for rate cuts diminishing, in which case we could see some sort of decline in gold below the level,” Water explained. The previously mentioned support will decline in the short term.
Gold prices fell 1% last week after data showed that US consumer prices rose strongly in February, with producer prices rising more than expected, dampening hopes for early interest rate cuts from the Federal Reserve.
