Gold stuck in narrow range as central bank meetings approach

Gold prices stabilized on Tuesday, as the dollar declined, but prices were stuck in a narrow range as investors refrained from making big bets ahead of major central bank meetings.

By 0726 GMT, spot gold prices was stable at $1708.35 per ounce, while US gold futures fell 0.3% to trade at $1704.80.

The US dollar fell 0.5% against its competitors, which makes bullion priced in the US currency less expensive for buyers holding other currencies, Reuters reported.

Market participants now expect the US Federal Reserve to raise interest rates by 75 basis points at its meeting scheduled for July 26-27. The European Central Bank and the Bank of Japan meet on Thursday, and the ECB is widely expected to announce a 25 basis point increase.

Gold is seen as a hedge against inflation, but higher interest rates raise the opportunity cost of holding the yellow metal.