Gold slips as dollar firms; central banks await meetings

GOLD PRICES slipped on Monday as the dollar held firm and investors braced for a slew of policy decisions from major global central banks including the US Federal Reserve this week.

Spot gold was down 0.4% to $2,147.79 per ounce, as of 0534 GMT. US gold futures fell 0.5% to $2,150.40.

“A fairly hawkish outcome from the Fed has been baked in... it shows a fairly strong consensus that there might only be one or two cuts this year,” said Kyle Rodda, a financial market analyst at Capital.com.

The Fed is considered certain to keep rates at 5.25%-5.5% at the end of its two-day meeting on Wednesday. But there is a possibility that the Fed might signal a higher-for-longer outlook on policy given the stickiness of inflation at both a consumer and producer level.

Traders are now pricing in an about 56% chance of a rate cut in June. Higher interest rates reduce the appeal of holding nonyielding gold.

Last week, data showed that US consumer prices increased solidly in February and producer prices rose more than expected amid a surge in the cost of goods like gasoline and food.

The dollar held steady near a two-week high against its rivals, making gold more expensive for other currency holders.

Meanwhile, the Bank of Japan is expected to exit its ultra-dovish monetary policy at its two-day meeting ending on Tuesday. The Bank of England will hold its meeting on Thursday and is expected to stay put on rates.

Spot silver dipped 0.6% to $25.01; platinum fell 0.6% to $927.63 per ounce; and palladium lost 0.6% to $1,071.01.