“(Gold) is still hovering around its lows and a big part of this is the anticipation of the Fed announcement on Wednesdaysaid Daniel Pavilonis, senior market strategist at RJO Futures, adding that higher Treasury yields were also putting pressure on prices.
The Fed, at the end of its two-day policy meeting, is expected to raise interest rates by 75 basis points to combat stubbornly high inflation, with markets even seeing a 20% chance of a 100 basis point hike. .
Meanwhile, concerns about rising inflation have also led other central banks to tighten monetary policy.
Although gold is considered a hedge against inflation, rising interest rates raise the opportunity cost of owning zero-yield bullion.
For its part, the dollar remained near its maximum of two decades, which makes gold more expensive for foreign buyers. While the yield on US 10-year Treasury bills rose to its highest level in more than 11 years.
Meanwhile, silver fell 1.1% to $19.35 an ounce, platinum fell 0.3% to $904.66, and palladium fell 0.8% to $2,118.20.
Notably, the London gold market – the world’s largest physical gold trading center – was closed for Queen Elizabeth’s funeral, limiting trading volume on Monday.
Source: Ambito
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