Gold remained steady on Tuesday as investors adopted a cautious approach ahead of the upcoming U.S. Federal Reserve policy meeting, which could provide further insights into the timing of potential interest rate cuts this year. As of 04:26 GMT, spot gold showed minimal change, holding at $2,160.79 per ounce, while U.S. gold futures remained flat at $2,164.10.
In Saudi Arabia, gold experienced a slight increase, with 24-kara reaching SAR3,033. Additionally, in the Kingdom, 10 grams of 24K gold are being sold for SAR2,603, and the price per ounce of gold is SAR8,085.
Read more: Gold prices in Saudi Arabia drop as traders turn cautious ahead of Fed meeting
With expectations that the Federal Reserve will keep rates unchanged at the conclusion of its two-day monetary policy meeting on Wednesday, market participants are eagerly awaiting the policymakers’ updated economic projections and interest rate forecasts.
Gold holds above $2,150 support level
Tim Waterer, chief market analyst at KCM Trade, noted that gold is maintaining its position above the support level of $2,150/oz. If it continues to stay above that level, there could be potential gains in the short term, depending on the tone set by Fed Chair Jerome Powell during the meeting. However, if the Fed focuses on recent consumer price index (CPI), producer price index (PPI) data, and the strength of the labor market, hopes for rate cuts may diminish, potentially causing gold to dip below the support level and decline in the short term.
Last week, gold prices dropped by 1 percent following the release of data showing solid increases in U.S. consumer prices in February and higher-than-expected producer prices. These figures dampened expectations for early rate cuts by the Fed. The attractiveness of gold diminishes when interest rates rise since it does not provide any yield. Currently, traders are pricing in a roughly 51 percent chance of a Fed rate cut in June, compared to 56 percent on Monday, according to the CME FedWatch Tool.
In addition to the Fed, several other central banks, including those of Japan, England, Australia, Norway, Switzerland, Mexico, Taiwan, Brazil, and Indonesia, will be holding meetings this week. Most of them are expected to maintain their current interest rates. Spot silver saw a 0.3 percent gain, reaching $25.10 per ounce, while platinum rose by 0.3 percent to $915.65. On the other hand, palladium slipped by 1.3 percent to $1,019.26.
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