Gold prices tread water as Fed meeting looms

The yellow metal tumbled from record highs hit earlier in April as safe-haven demand waned in the absence of any escalation between Iran and Israel. This left gold vulnerable to outflows in the face of restrictive U.S. monetary policy.

steadied at $2,334.66 an ounce, while expiring in June were flat around $2,345.60 an ounce by 01:10 ET (05:10 GMT). 

Fed meeting awaited after PCE data shock

A relatively strong dollar also weighed on gold, especially in the wake of a hotter-than-expected reading on the - which is the Fed’s preferred inflation gauge.

Growing signs of sticky U.S. inflation saw traders largely price out expectations for early rate cuts by the Fed. The central bank is now only expected to begin trimming rates in September, or even the fourth quarter.

This put an upcoming squarely in focus more cues on the central bank’s plans for rates. 

Higher-for-longer rates bode poorly for gold, given that they increase the opportunity cost of investing in the yellow metal. But while gold prices sank in recent sessions, they were still trading positive for the year, amid persistent fears that high interest rates will weigh heavily on global economic growth. 

Other precious metals were mildly positive after steep losses through the past two weeks. rose 0.6% to $930.05 an ounce, while rose 0.3% to $27.613 an ounce.