Precise Investors Editorial Team
Spot gold dropped 0.7 per cent to $4,045.89 per ounce after gaining 1 per cent on Monday
Gold prices fell on Tuesday, amid a stronger dollar, while markets looked to the U.S. central bank’s upcoming policy decision for clues on the interest rate outlook.
Spot gold dropped 0.7 per cent to $4,045.89 per ounce by 0448 GMT after gaining 1 per cent on Monday.
We’re oscillating in this narrow range between $3,950 and $4,200, and I think the market is just waiting for Fed signals, said Ilya Spivak, head of global macro at finance content network Tastylive.
The U.S. central bank will conclude its two-day policy meeting on Wednesday. Expectations that the central bank will hold interest rates steady stand at 62 per cent, while 38 per cent of market participants expect at least a 25-basis-point rate hike, according to CME FedWatch — that is up from 16 per cent a week earlier.
Markets are pricing in an 81 per cent chance for a hike at the bank’s September meeting.
U.S. president on Monday called on the central bank to lower interest rates, saying the U.S. should have the lowest interest rate in the world.
The president also said on Monday that the U.S. was having “good talks” with Iran and there was a chance of a deal to resolve their conflict.
Tehran appeared to quickly test the U.S., with Saudi Arabia, Jordan and Iraq reporting attacks on Monday.
Spivak added that if the central bank meeting generates language that’s not setting the groundwork for a rate hike in September, gold is likely to rally above $4,200 per ounce.
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