Gold loses footing as US dollar rises; Fed in focus

GOLD PRICES retreated on Tuesday as the dollar strengthened a day before the Federal Reserve signals its interest rate stance at the end of the US central bank’s two-day policy meeting.

Spot gold fell 0.2% to $2,155.93 per ounce as of 2:18 p.m. EDT (1817 GMT), hovering close to the one-week low reached on Monday.

US gold futures settled 0.2% lower at $2,159.70.

The dollar gained 0.2%, having touched a more than two-week high earlier in the session, making gold more expensive for overseas buyers.

Gold is seeing “some exhaustion to the upside as the positions moved swiftly over the past week or two and now it’s taking a bit of a breather as the Fed pricing comes off a bit,” said Ryan McKay, commodity strategist at TD Securities.

Gold prices hit a record peak of $2,194.99 per ounce on March 8, but prices dipped nearly 1% last week after the release of hotterthan-expected February US consumer prices and producer prices reduced hopes of early Fed rate cuts due to the threat of persistent inflation.

Higher inflation prompts the Fed to keep interest rates elevated, weighing on non-yielding gold.

Although the Fed is widely expected to hold rates steady on Wednesday, the market is awaiting comments from Fed Chairman Jerome Powell afterwards for its latest rate outlook.

Meanwhile, the Bank of Japan ended eight years of negative interest rates and other remnants of its unorthodox policy.

Spot silver fell 0.5% to $24.91 per ounce; platinum lost 1.8% to $894.19; palladium slipped 3.8% to $992.50. —