Gold prices flat on caution ahead of Fed meeting
Timilehin Adejumobi
1 min read
Gold prices were flat on Tuesday, as cautious market participants awaited fresh cues from top central banks on their monetary policy plans, especially from the U.S. Federal Reserve.
Spot gold was unchanged at $1,982.69 per ounce by 0248 GMT. U.S. gold futures fell 0.1% to $1,991.00.
The Fed, which meets on May 2-3, is widely expected to raise interest rates by 25 basis points.
Gold prices could move towards $2,000 if the Fed highlights recession worries and hints at a pause in the rate hike cycle, said Ajay Kedia, director at Kedia Commodities in Mumbai.
U.S. manufacturing contracted in April but there was a build-up of inflation pressures, supporting expectations of Fed rate hike, according to data released on Monday.
The European Central Bank (ECB) is likely to increase rates for the seventh straight meeting on Thursday.
Bullion is known as a hedge against inflation and economic uncertainties, but rising rates tend to diminish demand for the zero-yielding asset.
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