Bullion up about 4% for the month
Federal Open Market Committee meets from April 30-May 1
Silver, platinum headed for monthly gains
Rewrites, adds analyst comment and updates prices, as of 0355 GMT
By Sherin Elizabeth Varghese
April 30 (Reuters) –Gold prices were set for a third straight monthly gain, even as bullion prices eased on Tuesday as the dollar firmed ahead of the Federal Reserve’s policy meeting starting later in the day.
Spot gold XAU= was down 0.2% at $2,329.69 per ounce, as of 0355 GMT. US gold futures GCcv1 were down 0.7% at $2,341.00.
The dollar index .DXY edged 0.3% higher, making greenback-priced bullion less attractive for overseas buyers. USD/
“I think we’re starting to see gold prices move back towards those fundamentals, that is a stronger dollar and higher yields after geopolitical risks have eased and there is some downside risks that the Fed’s going to serve a hawkish tone towards the monetary policy, Kyle Rodda, a financial market analyst at Capital.com said. USD/ US/
Bullion has gained more than 4% so far this month, fueled by strong central bank-buying, safe-haven inflows amid geopolitical tensions.
This week’s important market events are the Federal Reserves policy meeting from April 30-May 1 and the non-farm payrolls data due on Friday. The US Fed is expected to hold its benchmark interest rate steady at 5.25%-5.5% at this meeting.
“If there is a possibility that the Fed could lead to a slight repricing of high probabilities of rate cuts, or at least more than what is currently expected in the market, that would be very supportive for gold,” Capital.com’s Rodda said.
According to the CME’s FedWatch tool, investors are currently pricing in a single rate cut this year and see it coming in November amid stubborn inflation numbers and hawkish rhetoric from Fed officials, including Chair Jerome Powell. FEDWATCH
Higher rates reduce the appeal of holding non-yielding gold.
Spot silver XAG= fell 0.6% to $26.95 per ounce, spot platinum XPT= was down 0.1% at $946.66. Both the metals were set for monthly gains.
Spot palladium XPD= sheds 0.6% to $968.00 per ounce.
Reporting by Sherin Elizabeth Varghese and additional reporting by Ashitha Shivaprasad in Bengaluru; Editing by Subhranshu Sahu and Sherry Jacob-Phillips
