Investing.com – Gold drifted lower as the dollar strengthen amid expectations that the Federal Reserve will hikes rates next week for the first time this year.
Gold futures for April delivery on the Comex division of the New York Mercantile Exchange fell by $5.60, or 0.43%, to $1,312.20 a troy ounce.
Gold prices were set for a fourth-straight weekly slump as investors remained wary of buying the dips in the precious metal ahead of the Federal Reserve’s two-day meeting which gets underway March 20.
According to Investing.com’s Fed rate monitor, traders see a 93% chance the Federal Reserve will hike rates by 0.25% to a range of 1.50% to 1.75% on March 21.
While many believe that the Federal Reserve March rate hike has been priced in, the central’s bank’s rate-hike projections or so-called dot-plots – illustrating where individual FOMC members believe rates are heading – are expected to be shifted upward, pointing to a faster pace of rate hikes.
In December, the Federal Reserve’s dot-plots indicated that the majority of FOMC members believed that three-rate hikes were appropriate for 2018.
Gold tends to come under pressure to moves higher in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.
Also adding to dollar weakness was falling safe-haven demand as investor fears that chief of staff, John Kelly, was set to resign eased amid a Wall Street Journal report suggested that President Donald Trump and John Kelly have struck a “truce.”
In other precious metal trade, silver futures fell 0.90% to $16.28 a troy ounce, while platinum futures lost 0.54% to $950.20 an ounce.
Copper fell 0.70% to $3.10, while natural gas was flat at $2.683.