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Gold Prices Tumble Ahead Of Fed Meet

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Gold prices declined on Monday and the dollar held near highs ahead of an expected U.S. rate hike this week.

U.S. treasury yields nudged up in European trade, but were a tad below of their peaks hit last week.

Spot gold fell around 1 percent to $1,879.43 per ounce, while U.S. gold futures were down 1.7 percent at $1,878.80.

Market participants expect the Federal Reserve to raise rates by 50 basis points and announce the launch of balance sheet reduction on Wednesday to contain rising inflationary pressures.

There is uncertainty, however, as to whether the tightening process will be accompanied by a hawkish statement from Fed Chair Jerome Powell.
China growth concerns and the Ukraine conflict were also on investors’ radar.

China released data on Saturday showing that factory activity in the country contracted for a second month to its lowest since February 2020 because of Covid lockdown.

Separately, Caixin released its own manufacturing purchasing managers’ index, revealing a second straight month of deterioration.

Traders also weighed the impacts of China’s measures to contain the Covid outbreak and moves by Europe to cut its reliance on fuel from Russia.

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