Gold prices steady with investor focus on Fed meet

Gold prices traded in a tight range on Tuesday, as investors maintained a cautious stance ahead of this week’s policy meeting by the Federal Reserve where the U.S. central bank is likely to hike interest rates to tame high inflation, Reuters reported.
Spot gold held its ground at $1,676.80 per ounce, as of 0037 GMT. U.S. gold futures rose 0.5% at $1,686.70.
The U.S. Fed, at the conclusion of its two-day policy meeting on Wednesday, is expected to raise interest rates by 75 basis points, with markets even seeing a 19% chance for a 100 bps increase.
High interest-rate environment increases the opportunity cost of holding non-yielding bullion.
Gold prices weakened on Monday, hovered toward a 29-month low hit on Friday, as the U.S. dollar and Treasury yields firmed on expectations of a hefty Fed rate hike.
Even though the dollar index dipped 0.3%, it wasn’t far from a 20-year high. Stronger greenback makes bullion more expensive for other currency holders.
The benchmark 10-year Treasury yield held close to its highest level in over a decade scaled on Monday.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.30% to 957.95 tons on Monday from 960.85 tons on Friday.
Spot silver lost 0.7% to $19.48 per ounce. Platinum dipped 0.1% to $918.29 and palladium was down 1.5% at $2,191.75.