By Arundhati Sarkar
(Reuters) – Gold prices were flat on Monday as cautious investors positioned themselves for the U.S. inflation data and the Federal Reserve’s interest rate verdict along with other major central bank meetings this week.
Spot gold was listless at $1,960.28 per ounce by 0649 GMT. U.S. gold futures were down 0.1% to $1,974.50.
“While the Fed is expected to hold their interest rate, they are unlikely to deliver a dovish undertone required to tempt gold bulls back to the table in a meaningful way,” said Matt Simpson, senior market analyst at City Index.
The U.S. consumer price index and producer price index data on Tuesday and Wednesday, respectively, are on investors’ radar, as a hotter CPI number could alter rate expectations.
Fed fund futures show a 73.6% probability that the U.S. central bank will keep its benchmark overnight interest rate in the 5.00%-5.25% range when its two-day meeting ends on Wednesday.
“There are (still) some reservations that keeping rates on hold is just a wait-and-see from the Fed rather than an end to tightening, and there is still the possibility of additional tightening over subsequent meetings,” Yeap Jung Rong, market strategist at IG, said.
Lower rates lift the appeal of the zero-yield asset.
Bullion does not appear to be in any hurry to break out of the $1,935-$1,985 range, City Index’s Simpson said, adding if the Fed’s “message is not as hawkish as expected, it could allow gold to head for the $1,985-$2,000 zone.”
In the broader market, Asian shares stalled in cautious trading as investors braced for central bank decisions. [GLOB/MKTS]
Markets in Australia were closed on Monday due to a public holiday.
Spot silver fell 0.4% to $24.1811 per ounce while platinum shed 0.2% to $1,006.74.
Palladium ticked down 0.1% to $1,321.61 after hitting its lowest since May 2019 on Friday.
(Reporting by Arundhati Sarkar in Bengaluru; Editing by Sonia Cheema and Sherry Jacob-Phillips)
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