Gold price dips to $2,150 as investors turn cautious ahead of Fed’s interest rate decision.
The US Dollar advances on hopes that the Fed could delay rate-cut plans.
10-year US yields fall moderately but hold strength on lower expectations for the Fed reducing interest rates in June.
Gold price (XAU/USD) drops to $2,150 in Tuesday’s European session as a strong US Dollar weighs heavily on the precious metal. The appeal for Gold remains subdued amid uncertainty ahead of the Federal Reserve’s monetary policy decision and the release of the quarterly dot plot on Wednesday.
The Fed is widely expected to keep interest rates unchanged in the range of 5.25%-5.50% for the fifth time in a row, but uncertainty over rate-cut projections keeps the Gold price on the tenterhooks. Investors are scaling back bets that the Fed could begin reducing interest rates in June, putting further downside pressure on Gold.
Meanwhile, 10-year US Treasury yields have fallen slightly to 4.32% but remain broadly strong on hopes that the first Fed rate cut, which is currently anticipated in June, will be delayed. Higher-than-expected consumer and producer inflation data are casting doubts among investors that this policy pivot will indeed occur in June or will be further postponed.
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