Gold recovers before central bank meetings

There was little change in gold prices on Monday ahead of the Federal Reserve’s (US central bank) decision on monetary policy and a series of other central bank meetings this week.

According to Reuters, by 1311 GMT, gold in spot transactions rose 0.2% to $2,159.32 per ounce, after falling to its lowest level since March 7 earlier in the session. US gold futures rose 0.1% to $2,163.

“Gold traders are expected to remain vulnerable to what Federal Reserve Chairman Jerome Powell might say about the FOMC’s thinking on a possible interest rate cut in June,” said Han Tan, chief market analyst at Xenity Group.

He added, “If the Federal Open Market Committee cuts interest rates by less than three 25 basis point cuts in 2024, this would push the precious metal to lose more of its monthly gains so far.”

Higher interest rates reduce appetite for gold, which does not earn interest.

Traders mostly expect the US Federal Reserve to keep interest rates unchanged at the end of the two-day policy meeting on Wednesday, and expect a 59 percent chance of an interest rate cut in June.

The metal hit a record high of $2,194.99 on March 8, but it fell 1% last week after data showed US consumer prices rose significantly in February and producer prices rose more than expected.