Gold prices were little changed on Monday, as the dollar held firm and investors assessed the path ahead for interest rates after the U.S. Federal Reserve’s hawkish tone.
Spot gold was flat at $1,956.93 per ounce by 0042 GMT. U.S. gold futures fell 0.1% to $1,969.20.
The dollar index held firm, making bullion less appealing for buyers holding other currencies.
Fed officials struck a hawkish tone in their first comments since the central bank held the policy interest rate steady at its meeting last week, but signalled that rate hikes would likely resume.
Inflation in key parts of the U.S. service industry “remains elevated and has not shown signs of easing,” the Fed said in its latest monetary policy report to Congress.
Gold is considered a hedge against inflation, but interest rate hikes raise the opportunity cost of holding non-yielding bullion.
Traders are now pricing in an about 72% chance of Fed rate hike in July, according to the CME Fedwatch tool.