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The Wall Street Journal reported that the gold price sank Monday as investors moved to lock in gains ahead of the two-day US Federal Reserve meeting scheduled for this week.
The Wall Street Journal reported that the gold price sank Monday as investors moved to lock in gains ahead of the two-day US Federal Reserve meeting scheduled for this week.
As quoted in the market news:
Gold for May delivery was recently down 1.3% at $1,243.10 a troy ounce on the Comex division of the New York Mercantile Exchange.
While few investors believe the Fed will raise rates at the end of its two-day meeting on Wednesday, a spate of strong U.S. economic data has put the possibility of higher borrowing costs later this year back in to focus. The odds of an increase by June have jumped to 45%, and the odds of one by December are now 74%, data from the CME showed. That is a sharp turnaround from early February, when the market was estimating the chance of a rate increase at either point at zero. Gold, which pays its holders nothing, struggles to compete with yield-bearing investments when interest rates rise.
Traders are also looking ahead to the Bank of Japan’s monetary policy meeting, which concludes Tuesday.
Peter Hug, global trading director at Kitco Markets, said in a note to clients:
Gold is somewhat unsettled ahead of this week’s [Fed] and BoJ meetings. Traders will once again dissect the tone in an attempt to glean clues on the timing of the Fed’s next trigger pull.
