Gold prices continued their downward trend on Tuesday as markets awaited the Federal Reserve’s policy meeting and U.S. non-farm payrolls data due this week for clues on the trajectory of interest rates.
Spot gold saw a 0.54 percent decrease to $2,323.12 per ounce, as of 5:47 GMT. Meanwhile, U.S. gold futures saw a 1.01 percent decline to $2,333.85.
Fed policy meeting
Markets expect the Federal Reserve’s two-day policy meeting, beginning on April 30, to conclude with the central bank keeping its benchmark interest rate steady within the range of 5.25 to 5.5 percent, according to the CME FedWatch tool. Expectations for interest-rate cuts have declined due to a hotter-than-expected consumer price inflation report in March, prompting traders to adjust their projections.
Higher interest rates typically diminish the appeal of holding non-yielding assets like gold. Thus, gold investors closely monitor the Fed’s decision regarding interest rates for its potential impact on its prices.
Non-farm payrolls data
Investors are eagerly awaiting the release of U.S. non-farm payrolls data for further insights into the Fed’s rate-cut projections. Experts will look for indications of the strength of the U.S. labor market and its implications for monetary policy.
Gold prices experienced a decline of 2.2 percent last week amidst easing tensions in the Middle East and diminishing expectations for early U.S. rate cuts in the current year. However, analysts have raised their 2024 gold price forecasts, anticipating that ongoing geopolitical tensions will prompt investors to seek refuge in safe-haven assets like gold, potentially driving prices to new highs.
Read: Oil prices dip ahead of Fed meeting as supply disruptions cool
Other precious metals
In addition to fluctuations in gold prices, spot silver saw a 0.94 percent decline to $26.86. Spot platinum rose 0.12 percent to $948.25 while palladium saw a 0.86 percent decline to $965.75.
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