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Gold hits 1-week low on firm dollar as traders eye Fed verdict

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By Kavya Guduru
(Reuters) – Gold prices fell on Tuesday to their lowest levels in more than one week as the dollar firmed, while investors kept a close watch on the U.S. Federal Reserve’s rate-hike decision and policy outlook.

Spot gold was down 0.8% at $1,906.51 per ounce, as of 0910 GMT, its lowest level since Jan. 19. Bullion gained 4.5% this month so far, putting it on course for a third straight monthly rise.

U.S. gold futures were down 0.9% at $1,922.00.

The dollar rose 0.3% against its rivals, making dollar-priced bullion a less attractive bet. [USD/]

“Gold prices are feeling the squeeze caused by a strengthening dollar as a build-up of expectations, ahead of this Wednesday’s Fed rate decision and policy statement,” said ActivTrades senior analyst Ricardo Evangelista.

The Fed’s decision is scheduled at 1900 GMT on Wednesday, followed by a press conference from Fed Chair Jerome Powell. The U.S. central bank is widely expected to increase rates by 25 basis points.

Lower interest rates tend to be beneficial for bullion, decreasing the opportunity cost of holding the non-yielding asset.

“Key support (for gold) remains at $1,900 where the trendline from the November low and the 21-day moving average meet,” Saxo Bank said in a note.

Meanwhile, central banks added 1,136 tonnes of gold worth some $70 billion to their stockpiles in 2022, by far the most of any year since 1967, the World Gold Council (WGC) said on Tuesday.

The WGC in a report said India’s gold consumption in 2022 fell 3% from a year earlier, as a rally in local prices to near-record highs curtailed bullion demand during the key December quarter. [GOL/AS]

Spot silver dipped 1.9% to $23.13 per ounce, platinum fell 0.9% to $1,000.25 and palladium lost 0.9% to $1,624.13.

All three metals were set for a monthly decline.

(Reporting by Kavya Guduru in Bengaluru; Editing by Sherry Jacob-Phillips)

Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.

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