Expectations that the Federal Reserve would cut interest rates in March faded, apparently putting a ceiling on gold prices.
Kelvin Wong, chief market analyst for the Asia-Pacific region at OANDA, said that geopolitical uncertainty in the Middle East – especially around shipping in the Red Sea – supports gold remaining above $2015.
Japanese stocks supported US and European futures to rise on Monday, as the hype around artificial intelligence fueled technology sector stocks ahead of a week full of central bank meetings, important economic data and corporate results.
Other safe havens declined, and the dollar index fell by 0.1 percent to the lowest level in almost a week, while benchmark US Treasury bond yields for ten years fell from the highest level in more than a month to 4.1148 percent.
Gold fell about 1 percent last week, its largest weekly decline in six weeks, after Federal Reserve officials said the central bank needed more inflation data before issuing any decision on lowering interest rates.
Traders currently expect interest rates to be reduced by 132 basis points this year, after two weeks ago they had expected them to be reduced by 150 basis points, according to the IRBR application of interest rate probabilities of the London Stock Exchange Group.
Higher interest rates would increase the opportunity cost of holding bullion.
Change in prices
Spot gold prices fell by 0.4 percent to $2,022.28 per ounce, by 0639 GMT. US gold futures also fell by 0.3 percent to $2,023.80.
As for other precious metals, silver fell in spot transactions by 1.9 percent to $22.18 per ounce, platinum fell 0.3 percent to $896.27, and palladium fell 0.8 percent to $938.70 per ounce.
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