Gold dips in early Tuesday trade

Gold dipped on Tuesday due to a stronger dollar ahead of the US Federal Reserve policy meeting, where clues about interest rate cuts this year are anticipated, according to Reuters.

Spot gold fell by 0.2 per cent to $2,156.67 per ounce, while US gold futures eased by 0.2 per cent to $2,159.80. The dollar’s 0.2 per cent rise to a near two-week high made gold more expensive for holders of other currencies.

Expectations are for the Fed to maintain rates at its meeting, with a focus on updated economic and interest rate projections.

Traders are watching for signals from Fed Chair Jerome Powell, with hopes for rate cuts possibly diminishing depending on recent economic indicators.

Last week, gold prices dropped by 1 per cent following solid increases in US consumer and producer prices, reducing expectations of early rate cuts. Higher interest rates lessen the allure of non-yielding gold.

The market currently sees a 51 per cent chance of a Fed rate cut in June, down from 56 per cent on Monday.

Meanwhile, the Bank of Japan (BOJ) ended eight years of negative interest rates and other unconventional policies on Tuesday.

Spot silver fell by 0.5 per cent to $24.92 per ounce, platinum decreased by 0.8 per cent to $905.18, and palladium dropped by 2.8 per cent to $1,003.75.