Gold prices experienced a decline of over 1% to reach a one-week low on Tuesday, primarily driven by an increase in the dollar and U.S. Treasury yields.
However, despite this downturn, robust safe-haven demand and continued central bank buying have contributed to sustaining bullion’s performance, marking its third consecutive monthly gain.
As of 09:18 a.m. ET (1318 GMT), spot gold was down by 1.3% to $2,304.69 per ounce, while U.S. gold futures witnessed a drop of 1.8% to $2,315.60. Despite the recent setback, gold prices have still managed to advance by 3.3% since the beginning of the month, following a peak of $2,431.29 recorded earlier in April.
Also read: India’s gold demand rises 8%, RBI buys 19 tonnes in March quarter: World Gold Council
The dollar strengthened by 0.3% compared to its counterparts, resulting in an increase in the price of gold for holders of other currencies, alongside a rise in the benchmark 10-year yield.
“Gold is down more than 0.5% so far in the session, weighed by a stronger U.S. dollar and elevated yields ahead of the U.S. Fed’s policy outcome on Wednesday. Although the FOMC members are likely to keep rates unchanged, their forward guidance will be closely watched, especially after the recent rise in inflation and slowdown in economic activity,” said Pranav Mer, VP – Research (Commodity & Currency) BlinkX and JM Financial.
The Federal Reserve commences its two-day monetary policy meeting on Tuesday, with expectations leaning towards maintaining rates at 5.25%-5.5%. Attention is focused on Fed Chair Jerome Powell’s speech scheduled for Wednesday, anticipated to provide further insights into projections regarding rate cuts.
Also read: Gold and silver rate today on 30-04-2024: Check latest rates in your city
Traders have reduced their expectations for Federal Reserve rate cuts this year, attributing this shift to the recent uptick in U.S. economic data, which has surpassed expectations, along with persistent inflationary pressures.
The price of spot silver experienced a decline of 2.6%, dropping to $26.42 per ounce, while platinum saw a decrease of 0.7%, settling at $940.85. Despite these declines, both metals remained poised to register monthly gains. Spot palladium, on the other hand, witnessed a more significant drop, falling by 3.2% to $943.
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Published: 30 Apr 2024, 09:41 PM IST